Improving the effectiveness of the consumer guarantee and supplier indemnification provisions under the Australian Consumer Law

Consumers expect to purchase products that work, and when they don’t work people should be easily able to enforce their consumer guarantee rights.

We welcome the opportunity to provide comments to the Commonwealth Treasury’s Consultation Regulation Impact Statement (‘CRIS’) on options for improving the effectiveness of the consumer guarantee and supplier indemnification provisions under the Australian Consumer Law (‘ACL’).

We support improvements to the Australian Consumer Law that ensure people are able to exercise their consumer guarantee rights. The current system is flawed and regularly results in consumers:

  • paying for their own repairs or replacements;
  • continuing to use faulty goods;
  • not having a working product that they have paid for; or
  • disposing of products early because they are faulty.

Many consumers are let down when things do go wrong with a good or service they have purchased. Currently, consumers have to spend considerable amounts of time and money to enforce their consumer guarantee rights. Despite this, many never receive a remedy they are legally entitled to. Instead, people have to continue using faulty products, purchase new products, or go without the product entirely. The loss of essential goods and services, such as a car, mobile phone, fridge, or laptop can have an immediate financial impact and, at times, a lasting impact on a person’s quality of life.

We strongly support the introduction of a civil prohibition for failing to provide a consumer guarantee remedy- outlined in Option 3 in Part A of the CRIS. Civil penalties must be strong enough to act as a deterrent to businesses that through design or neglect, do the wrong thing by consumers when products have major faults.  Businesses are incentivised to not provide people with a timely refund, repair or replacement, as they know there are no meaningful penalties for inaction. The prohibition and penalties must also be economy-wide.

It is essential to ensure that people can exercise their consumer rights to a repair, replacement or refund regardless of the nature of the faulty product or service. While the focus of our joint consumer submission is largely on Part A of the consultation, we support Options 3 and 4 in Part B of this consultation.

Specifically, we support a whole of economy civil prohibition for:

  • failing to indemnify suppliers where a consumer guarantee failure falls within the responsibility of a manufacturer or importer; and Improving the effectiveness of the consumer guarantee andsupplier indemnification provisions

●   manufacturers or importers retaliating against suppliers for seeking to enforce theirindemnification rights.

Read the full submission (PDF).

20220211 FINAL Improving consumer guarantee provisions CHOICE WJ CALC


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