Consumer Protection

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Chapter 12

• Consumer Protection

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Chapter overview

• This chapter looks at the concepts of
• Consumer protection legislation
• Types of conduct the legislation protects against
• Role of ACCC
• Product safety requirements
• Manufacturers liability

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Consumer protection legislation

• Statute and common law remedies protect consumers
  from conduct that is unconscionable or deceptive
• Consumer
• anyone who buys/uses any product/ service for
  personal use (not resale/ manufacture)

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Consumer protection legislation

• Trade Practices Act 1974 has two principle
  functions
• protect consumers
• prohibit restrictive trade practices
• This chapter focusing on consumer protection only

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Consumer Protection

• Act protects consumers from four types of conduct
• unconscionable conduct
• misleading and deceptive conduct
• specific false representations
• unfair practices
• Act also provides remedies

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Unconscionable conduct

• Factors to consider
• bargaining position of parties
• whether conduct was induced by any undue
  influence, duress, unfair practices
• purchase price paid, and if same price would have
  been paid if purchased from another party
• consumers ability to understand documents
  related to purchase
• if consumer had to comply with conditions that
  were unreasonably necessary

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Unconscionable conduct

• Remedies available
• proclaim whole/part of contract void
• repudiate some/all provisions of contract
• vary terms of contract
• issue refund of money or return of property
• pay damages to injured party
• order repair of goods

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Misleading deceptive conduct

• Second type of protection
• Plaintiff must provide evidence
• Did the defendants behaviour amount to conduct?
• Was the defendants conduct during the course of
  trade or commerce?
• Was the defendants conduct misleading or
  deceptive or likely to mislead or deceive?

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Conduct

• Most common forms
• statements that are literally true
• failure to disclose
• broken promises and incorrect predictions
• statements of opinion
• silence
• puffs
• false warranties or guarantees

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Trade or commerce

• Conduct must occur in trade or commerce rather
  than simply being related to it

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Conduct likely to deceive

• May include
• representations (written and spoken)
• representations by way of silence
• opinions or predictions
• warranties contained in contracts

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Misleading deceptive conduct

• Remedies
• injunction
• corrective advertising
• damages
• ancillary orders

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Specific false representations

• Third type of protection
• See table 52

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Unfair practices

• Fourth type of protection
• Corporation shall not engage in conduct liable to
  mislead public
• Unfair practices
• Not disclosing total price
• Offering gifts and prizes
• Bait advertising
• Referral selling

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Unfair practices

• Continued
• Accepting payment without intending to supply
• Misleading statements about home operated
  businesses
• Coercion or harassment at place of residence
• Pyramid selling
• Unsolicited credit cards
• Inertia selling

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ACCC

• Australian Competition and Consumer Commission
• Regulatory agency established to
• protect consumers
• regulate anti-competitive business practices

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Consumer product safety

• Supply of products not complying with safety
  standards, deemed unsafe or banned is criminal
  offence
• Unsafe/banned products if not recalled by company
  can be recalled by Minister

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Consumer product safety

• Defences for breaches
• reasonable mistake
• breach caused by unreliable information provided
  by external party
• breach was an accident
• defendant had no control
• defendant too reasonable care to avoid breach

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Consumer product safety

• Remedies for breaches
• fine
• injunction
• corrective advertising
• damages
• ancillary orders
• community service orders
• disclosure orders

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Manufacturers liability

• Manufacturer
• anyone who produces goods by assembling raw
  materials/ components that become product for
  purpose of trade
• Duty of care to avoid acts or omissions during
  manufacturing process/design that could cause
  personal injury/damage to property

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Conditions implied in consumer contracts

• Implied conditions
• prohibits providing false descriptions
• must have fitness for purpose
• must be of a merchantable quality

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Manufacturer defences

• Defect not present when consumer acquired product
• Defect due to compliance with compulsory product
  safety standard
• Level of knowledge and technology was
  insufficient to identify defect

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Chapter review

• In this chapter you have looked at
• Consumer protection legislation
• Types of conduct the legislation protects against
• Role of ACCC
• Product safety requirements
• Manufacturers liability