In January 2011 the Australian Consumer Act came into force. For all the fanfare that accompanied its enactment, the reality is that the Act is cumbersome and difficult to apply, does little to help consumers and small businesses, and there is real doubt that its goals are realistic or even practicable. Discuss
The Trade Practices Act (TPA) will indeed cease to exist from 31 December this year but on 1 January 2011 the Competition and Consumer Law Act (CCA) took effect. But there is a lot more to this than simply a name change.
Although the TPA competition provisions simply migrate across to the CCA it radically reshapes Australian consumer law by setting up a national consumer law ...view middle of the document...
5 billion per year.
The ACL has been introduced in two instalments. The first – which creates a national unfair contracts terms regime and introduces new penalties, ACCC enforcement powers and consumer redress provisions – has already been passed by both Houses of the federal parliament.
The second – which implements general and specific consumer protection substantially similar to that currently contained in the TPA – was introduced on 17 March. The Bill has bipartisan support and should pass through parliament without complications.
Implications for franchisors. The major threat has already been removed. The original draft of the national unfair consumer terms law applied to franchise agreements. The power to set aside unfair terms in standard form contracts goes far beyond the reach of the business unconscionability provisions and would have had very significant ramifications for the sector.
The new law – based on the Victorian law – now applies only to traditional consumer contracts. Franchise systems whose franchisee use standard form documents in contracting with franchisees will need to audit, and possibly redraft, their standard form contracts.
Most significant for franchisors is the introduction of civil pecuniary penalties for unconscionable conduct and false representations (but not for misleading conduct or contravention of the Franchising Code of Conduct) and the increased powers of the ACCC to issue substantiation, infringement and public warning notices and to conduct random audits.
The balance of the provisions, which are closely based on existing and familiar provisions, are unlikely to cause much concern although referring to our old friend s52 (misleading conduct) as s18, or to s51AC (unconscionable conduct) as s22, will take some adapting to.
Most Australians believe it is corrupting our values. Public awareness of the cost of consumer lifestyles has given rise to an inner conflict between what we do daily and what we believe is right for us and our society. A large majority of Australians believe that escalating materialism has harmful effects. According to a survey taken in December 2004, 80 per cent agree with the proposition, “Most Australians buy and consume far more than they need: it’s wasteful” and 75 per cent of Australians agreeing with the proposition “Too many Australians are focused on working and making money and not enough on family and community”.
Australians seem particularly troubled about the corrupting effect of materialism on children. Four in five believe strongly that Australia’s materialistic society makes it harder to instill positive values in children. This explains why 86 per cent believe greater limits should be placed on advertising to children. If Australians were able to vote on a referendum o ban advertising to children I have no doubt it would be carried by a large majority.
Consumerism is a social and economic order that is based on the systematic creation and fostering...