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This course provides pieces of information about what comprises the Australian Competition and Consumer Law. This tackles consumer rights and guarantees, repair, replacement or refund policy, anti-competitive behaviour (e.g. cartel conduct, misuse of market power, unconscionable conduct, etc.), false advertising (including managing online reviews) and pricing and surcharging (including price fixing, payment surcharges, etc.).
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Guarantees and Rights of Consumers
The Australian Consumer Law (ACL) identifies consumer rights called consumer guarantees, which include the right for a refund, repairs and replacement of damaged products, and the right to cancel a service deemed faulty.
So which products and services fall under this guarantee?
Products and services that are: Under $40,000 Over $40,000 that are commonly bought for personal or household use After 1 July 2021, the threshold amount will increase to $100,000.
Business vehicles and trailers (irrespective of cost) that are used mainly to transport goods Even with the warranties given or sold to you, you should still be provided with automatic guarantees.
Products must: Match product descriptions (indicated by a salesperson, in packaging and labels, and in advertisements) 2. Match any demonstration model or sample you asked for 3. Stay true to the purposes they claim to fulfil or meet 4. Come with full title and ownership 5. Not carry any hidden debts or extra charges 6. Come with undisturbed possession, so you have full ownership of the product 7. Satisfy any extra promises made about performance, condition and quality (e.g. lifetime guarantees and money-back offers). 8. Ensure availability of spare parts and repair facilities for a reasonable time after purchase unless you were told otherwise.
Consumer guarantees on products and services also apply to (Take a guess):
Exceptions to guarantees Consumer guarantees do not apply if you: Got what you bought, changed your mind about it, found a cheaper one elsewhere, and decided you didn't like or had no use for the purchase Misused a product in any way that caused the problem Knew of or were made aware of the faults before you bought the product Asked for a service to be done in a certain way against the advice of the business or were unclear about what you wanted. Rights to a repair, replacement, refund, cancellation or compensation do not apply to items: Worth more than $40,000 purely for business use (e.g. machinery or farming equipment) You plan to on-sell or change so that you can re-supply as a business Bought as a one-off from a private seller, for example at a garage sale or fete Bought at auction where the auctioneer acted as an agent for the owner Where the contract is to store or transport goods as part of business activities.
Repair, Replacement or Refund
You are free to ask for a free repair, replacement or refund, but you are not always entitled to one. For example, the consumer guarantees do not apply if you already got what you asked for, changed your mind about it, found a cheaper one elsewhere, or decided that you did not like or need the purchase.
For a minor problem with a product or service, you may be given a free repair instead of a replacement or refund.
For a major problem with a product, you may ask for a replacement or refund. For a major problem with a service, you may choose to receive compensation for the drop in value below the price paid or a refund.
Competition and Consumer Act (ACC), Section 45, prohibits contracts, arrangements, understandings or concerted practices that have the purpose, effect or likely effect of substantially lessening competition in a market, even if that conduct does not meet the stricter definitions of other anti-competitive conduct such as cartels.
A number of factors are considered by the courts to reach a decision: Is there an 'agreement' or 'concerted practice' caught by the Act?
Under the Act, agreements, contracts, arrangements and understandings possess similar meanings. Essentially they involve the development of a plan of action between two or more people that may be unlawful but they have every intention of following.
Cartels Businesses that make agreements with their competitors to fix prices, rig bids, share markets or restrict outputs are breaking laws and stealing from consumers and businesses by inflating prices, reducing choices and damaging the economy.
Certain forms of anti-competitive conduct that are known as cartel conduct: Price fixing (competitors agreeing, instead of competing against each other, on a pricing structure)
Sharing markets (competitors agreeing to divide a market causing participants to be sheltered from competition)
Rigging bids (suppliers communicating before lodging bids and agreeing among themselves who will win and at what price)
Controlling the output or limiting the amount of goods and services available to buyers
Which of the following are considered as cartel conduct?
Misuse of Market Power A business that has a significant level of power in a market should not engage in conduct that has the purpose, effect or likely effect of substantially reducing competition in a market as this behaviour constitutes ‘misuse of market power’. It is not unlawful to possess market power of itself or to seek such power by providing the best products and services. However, the courts may determine whether there has been a misuse of market power by checking if the company (1) has substantial market power and (2) is engaging in conduct for the purpose, effect or likely effect of substantially reducing competition. Again, it is not illegal to have market power or to use it. Conduct by a business with market power is only a contravention of the Competition and Consumer Act 2010 (CCA) if it has the purpose, effect or likely effect of substantially reducing competition.
Unconscionable conduct generally means very harsh conduct that goes against good conscience. Under the ACL, businesses should not engage in unconscionable conduct when dealing with other businesses or their customers.
When assessing whether conduct related to selling or supplying of goods and services to customers or supplying or acquiring of the same items to or from a business is unconscionable, a court considers several factors.
How to Avoid Engaging in Unconscionable Conduct Do not take advantage of the other party when negotiating the terms of an agreement or contract Consider your customers' characteristics and vulnerabilities (e.g. use plain English when dealing with customers from a non-English speaking background) Ensure that your contracts are thorough, easy to understand, not very long and lack harsh, unfair or oppressive terms Ensure customers understand the terms of any agreement related to the transaction; allow them to consider the offer properly. For long contracts, provide a summary of the key terms Allow customers to seek advice about the contract before they sign it Do not reward your staff for unfair, pressure-based selling.
Any statement representing your products or services should be true, accurate and able to be substantiated.
There are fines for businesses that mislead consumers, whether intentional or not.
It is against the law for a business to give false or misleading statements. This includes advertisements or statements in any media (print, radio, television, and social media and online), on product packaging, or made by anyone representing your business.
Identifying fake reviews They are usually a ... ...part of a notable spike in reviews about a certain business over a limited period of time. ...written from the same email or IP address as each other or as the business reviewed. ...written about the same business, product or service where the reviewers’ accounts are very similar (e.g. same email addresses, usernames, passwords or IP addresses). ...written in overly positive or “marketing speak” writing styles. ...written in the same language as other reviews of the same business or product.
Don't make misleading claims on social media. Ensure that your marketing and promotional activities in any social media channels like Facebook and Twitter are free of false or misleading claims.
The same laws, the consumer protection laws that prohibit businesses from making false, misleading or deceptive claims about their products or services, apply to social media.
Minimise your risk. If you feel that you would not make a certain statement in any other type of advertising, don't post it on Facebook or other social media platforms.
It is safer to simply remove than respond to false, misleading or deceptive comments on social media since your response might not be enough to override the false impression made by the original comments.
Country of origin claims One of the factors that affect a consumer's decision to buy a product is the origin of the product, such as where it is grown, produced or made. When making a country of origin claim, you need to be truthful, clear, and accurate.
Pricing and Surcharging
Businesses have the freedom to set their prices and discount their goods and services as they see fit.
However, they must set their prices independently of their competitors. Also, pricing goods below cost can be illegal in particular circumstances.
Payment Surcharges If a company decides to apply a surcharge to its consumers for making a purchase using a credit, debit or prepaid card, the level of the surcharge should be reasonable and not excessive. The Competition and Consumer Amendment (Payment Surcharges) Act 2016 became a law on February 25, 2016, and it added a new section to the Competition and Consumer Act 2010 (CCA) that bans unfair payment surcharges and gives the ACCC new authority. The ban can be found in the CCA and works in conjunction with a Reserve Bank of Australia (RBA) standard. It basically aims to stop companies from imposing unfair and excessive surcharges. While it is not illegal for companies to recoup payment processing costs, it is unlawful to impose excessive surcharges on customers for using a certain payment method.
Requirements for businesses: All companies, regardless of their scale, are subject to this ban.
Therefore, payment surcharges are not needed for accepted payment methods, and if you don’t bill your customers with any payment surcharges, the ban will have no effect on you.
However, should you choose to impose a payment surcharge on a covered payment type, the amount of the surcharge should not be higher than your applicable costs of accepting that payment type.