The Albanese Government is introducing significant reforms to ban unfair trading practices under the Australian Consumer Law. These reforms aim to protect Australian consumers and small businesses from deceptive and manipulative practices that increase the cost of living. Expansion of Australian Consumer Law to cover unfair trading practices has been under consideration for many years. The intended outcome would be that a wider range of conduct would be prohibited – conduct that adversely affects consumers.
Executive summary: The Albanese Government has announced a series of reforms aimed at banning unfair trading practices under the Australian Consumer Law. These reforms target practices such as subscription traps, hidden fees, deceptive online tactics, and dynamic pricing, all of which contribute to the rising cost of living. The Government has also released a consultation paper on strengthening consumer protections, particularly in relation to Consumer Guarantees and Supplier Indemnification. The reforms will empower the ACCC and state agencies to issue penalties for breaches of these provisions. Stakeholder feedback is being sought, with final proposals expected in 2025. The overall goal is to protect consumers and small businesses from unfair practices, ensuring a fairer marketplace for all Australians.
Key Issues
The Government has identified several unfair trading practices that will be addressed under the new reforms, including:
– Subscription Traps: Businesses make it difficult for consumers to cancel subscriptions by using confusing or time-consuming processes.
– Drip Pricing: Hidden fees are added at various stages of a purchase, making the final cost higher than initially advertised.
– Deceptive Online Practices: Tactics such as creating a false sense of urgency or scarcity, or hiding material information, are used to manipulate consumer behaviour.
– Dynamic Pricing: Prices change during the transaction process, often without clear explanation.
– Unnecessary Account Creation: Consumers are required to create accounts and provide personal information to complete purchases.
– Lack of Customer Support: Businesses make it difficult for consumers to contact them when issues arise with products or services.
Proposed Reforms
The Government will consult with stakeholders on the design of these reforms before legislating a general prohibition on unfair trading practices. Specific prohibitions will target the practices outlined above.
Additionally, the Government has released a consultation paper on reforms to strengthen consumer protections under the Consumer Guarantees and Supplier Indemnification provisions of the Australian Consumer Law. These reforms will introduce penalties for suppliers who fail to provide remedies, such as repairs, replacements, or refunds, when required by law.
Next Steps
Following the consultation process, the Government will work with state and territory governments to finalise the reform proposals. The final legislation is expected to be introduced in the first half of 2025.
Conclusion
These reforms will ensure a fairer marketplace, reduce cost of living pressures, and empower regulatory bodies to take action against businesses that engage in deceptive practices. Stakeholder feedback is encouraged to ensure the reforms are effective and balanced.
