Changes to Western Australian consumer law

(Based on http://www.commerce.wa.gov.au/ConsumerProtection/Content/About_us/Significant_changes_to_consume.html)

The Fair Trading Act 2010 (FTA) introduces a number of changes to consumer laws. While most of these changes are tied to the introduction of the Australian Consumer Law (ACL), some relate to matters specific to Western Australia.

In Western Australia the Australian Consumer Law is implemented by way of the Fair Trading Act 2010. The Fair Trading Act 2010 will implement the Australian Consumer Law and will also replace the Consumer Affairs Act 1971, Fair Trading Act 1987 and the Door to Door Trading Act 1987.

The Commonwealth’s version of the Australian Consumer Law, implemented under the Competition and Consumer Act 2010, will apply to incorporated businesses in Western Australia. The Western Australian version of the Australian Consumer Law, implemented by the Fair Trading Act 2010, will apply to individual traders and incorporated businesses in Western Australia.

The significant changes are:

Commissioner’s powers

The Commissioner for Consumer Protection will have new powers to institute or defend legal proceedings on behalf of a business if it involves a matter of public interest.

Codes of practice

The state will retain power to make specific codes of practice. The enforcement process for codes will be streamlined. Under the Fair Trading Act 1987 the first breach of a Code must be responded to by seeking a deed of undertaking. Only on a subsequent breach can the Commissioner go to the State Administrative Tribunal (SAT) to require compliance with the code.  Under the new FTA the Commissioner can go straight to the SAT on the first breach. The maximum penalty for failure to comply with a code will increase from $10,000 to $50,000.

Definitions 

The ACL has a a new definition of ‘transparent’. If the ACL requires a document to be ‘transparent’, the document must be expressed in reasonably clear language, be legible and be presented clearly. In relation to unfair contract terms, the document must also be readily available to any affected party.

Unconscionable conduct 

The Fair Trading Act 1987 has a $3 million limit on matters that may be dealt with under the unconscionable conduct provisions. This limit is not included in the ACL.

Unfair contract terms

All the ACL provisions relating to unfair contract terms are new.  The ACL provides that a term will be regarded as unfair if it:

  • causes a significant imbalance in the parties’ rights and obligations arising under the contract;
  • it is not reasonably necessary to protect the legitimate interests of the supplier; and
  • it causes detriment, or there is a substantial likelihood of detriment, to the consumer.  Detriment is not limited to financial detriment.

False or misleading representations

There are two new false or misleading representations matters expressly covered in the ACL relating to:

  • testimonials; and 
  • the need to pay for a contractual right that is wholly or partly equivalent to rights under statutory consumer guarantees.

Offering rebates, gifts, prizes or other free items

Any rebates, gifts, prizes or other free items must be provided within a reasonable time after making the offer.

Wrongly accepting payment

Traders must not accept payment if there are reasonable grounds for believing the goods or services cannot be provided within the agreed time or a reasonable time if none is agreed.  If the trader accepts payment, the trader must supply the goods or services within the agreed time or a reasonable time if none is agreed.

Payment for unsolicited services

Consumers are freed from any liability to pay for unsolicited services, and they will have no liability for any loss or damage resulting from the supply of unsolicited services.

Multiple pricing

If goods have more than one displayed price, the trader must either sell at the lowest price or not sell the goods.

Single pricing

In specified circumstances, a trader must not supply goods or services to a consumer or advertise them, with only part of the cost displayed unless they also include a statement of the full price. For example, all known taxes and charges, including delivery must be included. This, however, does not apply if representations about cost are solely made to a body corporate.

Harassment and coercion

There is an extension of the existing prohibition on harassment or coercion in connection with supply/payment of goods and services to the sale, grant or payment of interest in land.

Third party schemes

The ACL repeals third party schemes laws currently regulated under the Fair Trading Act 1987.

Consumer guarantees

The Consumer guarantee provisions of the ACL are a new comprehensive set of rights and remedies for defective goods and services.  Consumer guarantees replace existing statutory warranties and implied conditions on goods and services.  Consumer guarantees apply to:

  • any type of goods or services costing up to $40,000;
  • a vehicle or trailer used mainly to transport goods regardless of the cost;
  • goods or services costing more than $40,000 which are normally used for personal, domestic or household purposes; and
  • leased, hired and second-hand goods.

Consumer guarantees do not apply to goods bought for commercial use.

The new consumer guarantees do not significantly change existing rights and obligations but make them clearer. 

Consumers will automatically receive a consumer guarantee regardless of any warranties that the manufacturer provides.  Whoever sold the goods or services, or made the goods, must honour the consumer guarantee.

If something goes wrong, the consumer should seek a remedy from the supplier and the supplier, in turn, should seek a remedy from the manufacturer.

  • For minor problems the supplier can choose to:
    • repair;
    • replace; or
    • refund.
  • For major problems the consumer can choose:
    • a refund
    • a replacement; or
    • compensation.

There are some new individual guarantees:

  • manufacturers of goods will take reasonable steps to ensure repair facilities and spare parts are reasonably available for a reasonable period after supply of the goods;
  • any express warranty provided by the trader will be complied with;
  • where consumers make known expressly or by implication the results sought from particular services, the services and any product resulting from the services will be of such nature and quality as might reasonably be expected to achieve that result; and
  • services will be provided within the agreed time or a reasonable time if none agreed.

Unsolicited consumer agreements

These provisions of the ACL will replace existing state and territory Door to Door Trading Acts and extend, in part, to telephone calls. 

These provisions regulate permitted hours for door to door calling, and include requirements to provide:

  • detailed written contracts; and
  • a cooling off period of 10 business days.

The cooling off period applies only to unsolicited door to door and telephone call sales.

Telephone calls and permitted hours are also covered by the Commonwealth’s Do Not Call Register.

There are two transitional regulations, allowing dealers to:

  • use agreements that comply with either the ACL or the Western Australian Door to Door Trading Act 1987 until 30 June 2011, and
  • supply goods (not services) to consumers during the 10 business day cooling off period, until 31 December 2011.  Dealers are still not permitted to accept any payment for goods or services during the cooling off period. 

Lay by agreements

The ACL provisions in relation to lay by agreements are all new, and traders must:

  • provide the consumer with an agreement in writing and the agreement must be ‘transparent’.
  • provide consumers with a right to terminate a lay by agreement before goods are delivered and there is to be no termination charge unless the agreement is terminated by the consumer and there has been no breach by the trader.
  • not terminate a lay by agreement unless the consumer has breached the agreement, the trader is no longer in business, or the goods are no longer available.
  • refund payments to the consumer if a lay by agreement is terminated, less any allowable termination charge. The Trader is also not entitled to any other damages for termination except those provided for in this provision.

Receipts

Traders must provide consumers with a transaction receipt for goods or services over $75. A consumer may request a receipt for items less than $75 which the trader must provide as soon as practicable. A GST receipt will be sufficient.

Itemised bills

Consumers may request an itemised bill for services provided. The bill must show how the price was calculated; the number of hours of labour involved and list all materials used and the charges for them.

Repairer requirements

This provides specific power to make regulations, prescribing the form and content of notices repairers must give to consumers when accepting goods for repair.

Product safety

There are a number of changes to the administration of product safety requirements intended to assist in establishing one Australian regime for product safety – in particular permanent bans and information standards.  The provisions have also been extended to apply to product related services for example installation rather than just products.  Although many of the ACL provisions provide for product safety decisions to be published only on the Internet, there is a requirement for such notices to be gazetted in Western Australia

  • Only the Commonwealth Minister can make safety standards for consumer goods or product related services.
  • State/Territory Ministers can impose interim bans on consumer goods and product related services.  Interim bans can be for 60 days and can be extended for another 30 days. The Commonwealth Minister can extend the interim ban for a further 30 days at the request of the State/Territory Minister.
  • Only the Commonwealth Minister can impose a permanent ban on consumer goods or product related services.
  • Suppliers must give notice to the Commonwealth Minister where they become aware that any consumer goods or services they supply may have caused death, serious injury or illness.
  • Only the Commonwealth Minister can make an information standard in relation to a consumer good or product related service.
  • Suppliers must notify the ACCC within two days of becoming aware that a consumer good or product-related service they have supplied has, or may have, caused serious injury, illness or death. Notification can be done online through the Product Safety website.

Penalties

The maximum penalties where criminal proceedings are brought have been increased to $1.1m for bodies corporate and $220,000 for individuals. Non-criminal proceeding remedies/actions specifically provided for are:

  • enforceable undertakings
  • substantiation notices;
  • public warning notices
  • pecuniary penalties (paid to the State or paid as compensation to victims and preference to be given to compensation for victims;
  • injunctions;
  • actions for damages by victims
  • compensation and other orders for non-party consumers –
  • community service and related orders
  • adverse publicity orders
  • disqualification from managing a corporation.