Download - NSW Fair Trading

Consumer law changes in NSW
Changes apply from 1 January 2011
The new Australian Consumer Law will replace previous
Commonwealth, State and Territory consumer protection
legislation in fair trading acts and the Trade Practices
Act 1974. The new law incorporates best practice from
existing State and Territory legislation.
Key changes
Much of the new law will be familiar, however some key
changes apply to:
● consumer guarantees
● product safety
● acceptable business practices
● unfair contract terms
● sales practices
● penalties.
Consumer guarantees
Consumer guarantees are a new comprehensive
set of rights and remedies for defective goods and
services. Consumer guarantees replace existing statutory
warranties 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
● leased, hired and second‑hand goods.
Which goods are not covered?
Consumer guarantees do not apply to goods:
● bought before 1 January 2011
● from one‑off sales by private sellers such as garage
sales and fetes
● at auctions, where the auctioneer acts as agent for
the owner
● costing more than $40,000 that a person would
normally buy for business use
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● to on‑sell or re‑supply
● to use, as part of a business to manufacture or
produce something else, or to repair or use on other
goods or fixtures.
Which services are not covered?
Consumer guarantees do not apply to services:
● bought before 1 January 2011
● costing more than $40,000 which are for commercial
use
● for transportation or storage of goods for the
consumer's business, trade, profession or occupation
● for insurance contracts.
The new consumer guarantees do not significantly
change existing rights and obligations but make them
clearer.
Consumers will automatically receive a consumer
guarantee from the supplier regardless of any voluntary
warranties that the manufacturer provides. Whoever sold
the goods or services, or made the goods, must honour
the consumer guarantee.
False and misleading claims
A supplier cannot tell a consumer that a consumer
guarantee does not exist. For example, it would be
misleading to suggest that defects are only covered by a
manufacturer's warranty.
A supplier cannot tell a consumer that they must pay for
rights equivalent to a consumer guarantee.
Remedies
Consumer guarantees apply to both minor and major
failures with goods and services. If something goes
wrong, the consumer should seek a remedy from the
supplier and the supplier, in turn, can seek a remedy from
the manufacturer.

Minor problems can normally be put right. Major
problems are ones that cannot be fixed or are too difficult
to fix.
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.
When seeking a remedy, consumers are not required to
return the goods to the supplier in the original packaging.
'No refund' and other signage
Signs that state 'no refunds' are unlawful, because
they imply it is not possible to get a refund under any
circumstance - even when there is a major problem with
the goods or service.
For the same reason, the following signs are also
unlawful:
● 'No refund on sale items'
● 'Exchange or credit note only for return of sale item'.
Signs that state 'No refunds will be given if you have
simply changed your mind' are acceptable.
Warranties and consumer guarantees
A supplier or manufacturer has to honour all warranties
and consumer guarantees.
Common types of voluntary warranties include an
express warranty, a warranty against defects/
manufacturer’s warranty and an extended warranty.
Product safety
The Australian Consumer Law includes a national
product safety regime. NSW Fair Trading and the
Australian Competition and Consumer Commission
(ACCC) have specific product safety roles under the law
which are summarised below.
Mandatory reporting requirements
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Suppliers must notify the ACCC within 2 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.
Safety warnings, bans and recalls
Both the Commonwealth Minister and NSW Fair Trading
Minister can issue safety warning notices and interim
bans in NSW. Interim bans last for 60 days and may be
extended to allow further investigation.
Only the Commonwealth Minister can impose permanent
bans. Any ban imposed by the Commonwealth applies
throughout Australia.
Compulsory recalls
Both the Commonwealth Minister and NSW Fair Trading
Minister can issue a compulsory recall notice for
consumer goods that:
● will or may cause injury
● do not comply with a mandatory safety standard, or
● are banned.
Mandatory safety standards
Only the Commonwealth Minister can make mandatory
safety standards that set specific requirements for
consumer goods or product related services.
Any standard made by the Commonwealth applies
throughout Australia.
For more information, visit the national product safety
website www.productsafety.gov.au
Acceptable business practices
Some rules around business practices have
changed under the law. A summary is listed below.
Proof of transaction
Suppliers must provide proof of a transaction to
consumers for goods or services:
● valued at $75 or more (as soon as practicable)
● valued under $75 within 7 days, if requested by the
customer.

Proof could include a tax invoice, cash register receipt or
a handwritten receipt.
Itemised bills
A consumer can ask a supplier for an itemised bill for
services. This request must be made within 30 days of
whichever happens later:
● the services are supplied, or
● the consumer receives a bill or account from the
supplier for the supply of the services.
The itemised bill must be:
● provided without charge
● provided within 7 days of the request
● expressed in plain language, legible and clear.
False or misleading representations
A number of changes or additions apply to the existing
law on false or misleading representations. When
providing goods and services it is unlawful to make:
● false or misleading testimonials
● false or misleading representations about consumer
guarantees.
Offering rebates, gifts, prizes etc
Suppliers should provide rebates, gifts or prizes as
described to the consumer within the time stated in the
offer, or if no time is stated within a reasonable time.
Supply after accepting payment
If the supplier accepts payment, the goods or services
should be supplied to the consumer as described and
within the specified time, or if no time is specified, within
a reasonable time.
Unfair contract terms
Unfair contract terms provisions introduced in July 2010
become part of the Australian Consumer Law on 1
January 2011.
The law applies to standard form consumer contracts
for the supply of goods and services, or for the sale or
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grant of an interest in land, to an individual for personal,
domestic or household use.
It does not apply to business‑to-business contracts. Most
insurance contracts are not covered.
The unfair contract terms provisions do not apply to
terms that:
● describe the goods, services or land that a consumer
has agreed to buy
● set the upfront price payable under the contract,
provided the price is disclosed before the contract is
entered into
● are required or permitted by law.
Sales practices
Some rules for sales practices will change. A summary of
the changes is outlined below.
Unsolicited consumer agreements
New rules apply to unsolicited consumer agreements for
goods and services.
The rules apply if negotiations are with a telemarketer
or a salesperson at a location other than the supplier’s
premises, the consumer did not invite the telemarketer or
salesperson and the transaction is more than $100 or the
value cannot be established.
The following is not considered an invitation to supply:
● requesting a quote
● giving a dealer contact details for another purpose
such as a competition
● contacting a supplier in response to an unsuccessful
telephone call or visit.
Permitted hours
The permitted hours in which a telemarketer or
salesperson can call have changed. Under the law
sellers cannot visit or call on:
● weekdays - before 9am or after 6pm (after 8pm for
phone calls)
● a Saturday – before 9am or after 5pm
● a Sunday or public holiday.

Contract and cooling‑off period
If a consumer agrees to buy something from
a telemarketer or salesperson, they must be given a
written copy of the contract and be informed of the
cooling‑off period.
A 10-business day cooling‑off period now applies, during
which consumers can cancel a purchase without penalty.
Payment and supply of goods and services
The new rules do not allow a supplier to supply any
goods or services, or accept or require payment, during
the cooling‑off period.
To give businesses time to adjust, for the first 12 months
of the ACL, a supplier can choose to:
● comply with the ACL or
● comply with the previous NSW law under which
businesses must not collect any fees during the
cooling‑off period for services supplied during that
period.
Exemptions
Unsolicited consumer agreement laws do not apply to:
● business contracts
● party plan events
● renewing an existing contract.
Unsolicited goods and services
A consumer who receives unsolicited goods or services
does not have to pay for them. Or for any loss or damage
due to supply of a service.
Penalties
The maximum criminal penalties are significantly higher
than those which previously applied.
The maximum penalty is $1.1 million for a body corporate
and $220,000 for an individual. New pecuniary penalties
will apply for the same amount.
www.fairtrading.nsw.gov.au
Fair Trading enquiries 13 32 20
TTY 1300 723 404
Language assistance 13 14 50
This fact sheet must not be relied
on as legal advice. For more
information about this topic, refer to
the appropriate legislation.
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Which parts of the Fair Trading Act
still apply?
The Fair Trading Act will still operate in relation to
important provisions not contained in the ACL, including:
● functions and powers of the Director‑General
● legal assistance
● powers of investigators
● industry‑specific regulation.
Purchases before 1 January 2011
Transactions that take place before 1 January will
continue to be covered by the previous legislation after 1
January 2011.
For example, goods sold on 24 December 2010 will be
covered by the existing statutory warranties, not the new
consumer guarantees.
Who enforces the law?
The Australian Consumer Law is jointly enforced by:
● NSW Fair Trading and other State and Territory fair
trading agencies
● Australian Competition and Consumer Commission
(ACCC)
● Australian Securities and Investments Commission
(ASIC) (for financial goods and services).
© State of New South Wales through NSW Fair Trading
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www.fairtrading.nsw.gov.au or email publications@services.nsw.gov.au