The ACL contains numerous obligations that regulate how companies can engage with consumers (including over the internet). The predominant focus of the ACCC’s enforcement activities recently has been on the prohibition of 'misleading and deceptive conduct' in trade or commerce. Businesses need to take particular care to ensure that they do not make misleading representations to consumers in Australia about their products and services or what remedies might be available under the ACL in relation to product or services claims.
The ACL also prohibits 'unconscionable conduct' in connection with the supply of goods or services. When considering whether conduct may be classified as unconscionable, consideration is given to factors such as the relative bargaining strengths of the business and the customer and whether the business used undue influence, pressure or unfair tactics.
The ACL similarly contains provisions prohibiting unfair contract terms contained in standard form contracts between a company and an individual consumer. Unfair contract terms are terms that would cause significant imbalance in the parties’ rights and obligations under the contract, are not reasonably necessary to protect the legitimate interests of the advantaged party, and would cause detriment (financial or otherwise) if relied on. A term found to be an unfair contract term is void. This unfair contract terms regime has been extended to certain business to business contracts where at least one of the parties is a small business and the upfront price payable under the contract is no more than A$300,000 or A$1 million if the contract is for more than 12 months.
Businesses must also have regard as to how they present prices. The ACL prohibits companies from stating the price for goods or services for consumers as a component of the total price, unless a single price is also prominently specified. The single price must include all quantifiable components including any taxes or charges imposed. There are some limited exemptions to this rule; for example, restaurants applying menu surcharges on specific days may be exempt from the component pricing requirements.
The ACL imposes consumer protection obligations on businesses undertaking unsolicited sales practices (including door-to-door selling and telephone sales) and entering into lay-by transactions with customers. There has been increased enforcement activity in this area in recent times.
The ACL also prohibits certain types of false representation, referral selling, undue harassment at a place of residence or business, supplying unsafe goods, sending unsolicited credit cards and requiring payment for the supply of unsolicited goods.