Prepare your business for changes to consumer guarantees - Conditsis Lawyers

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Prepare your business for changes to consumer guarantees

From 1 July 2021, consumer guarantees under the Australian Consumer Law (ACL) will apply to a broader range of goods and services. The amending legislation broadens the definition of a ‘consumer’ to mean a person or business who acquires goods or services (on or after 1 July 2021):

  • For an amount of up to A$100,000; or
  • That are ordinarily acquired for personal, domestic or household use; or
  • That are vehicles or trailers used mainly to transport goods on public roads.

The monetary threshold, currently A$40,000 has been increased to A$100,000. This potentially broadens what goods and services may be caught by the consumer protections under the ACL from next year. The change will not apply retrospectively. It will apply only to purchases made after the proposal is implemented.

The changes to the ACL come after a review of the ACL by Consumer Affairs Australia and New Zealand.

The change to the monetary threshold broadly reflects the effects of inflation since the $40,000 was set (when the ACL commenced operation on 1 January 2011).

The changes will also apply to ASIC Regulations that contain mirror provisions concerning financial products and services.

Businesses may face additional costs in cases where they are required to provide remedies for faulty goods or services that they would not otherwise have needed to provide under a lower threshold or voluntary store return or replacement policy.

A benefit to consumers is that it will capture ordinary consumer purchases of commercial products above the current $40,000 threshold, such as for example commercial glass for installation in a home.

Businesses should ensure that their terms and conditions are updated in line with the changes from 1 July 2021 and that staff are properly trained to understand the relevant ACL protections. The changes may also mean new record keeping processes to track sales and identify consumer contracts are implemented and that your business budget is set at a level that can satisfy claims for repairs, refunds or replacements.

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