ACCC issues warnings to Australian businesses following a sweep of retail website policies, terms and conditions

What are consumer guarantees under the ACL?

Under the ACL, consumers have automatic protections when purchasing goods and services, known as consumer guarantees. These include (without limitation) guarantees pertaining to acceptable quality, fitness for purpose and conformity with descriptions or samples.

Depending on the circumstances, if a good or service fails to meet a consumer guarantee, the consumer may be entitled to make a claim for a repair, replacement, refund, cancellation or compensation for damage or loss.

Significantly, a right to a remedy under the ACL will exist irrespective of any policy, term or condition that a business purports to impose. It is against the law for businesses to mislead or deceive consumers in relation to their rights to refunds or other remedies under the ACL.

What was the purpose of the ACCC sweep?

The purpose of the sweep was to review statements made by Australian businesses to assess whether the statements sought to restrict consumer guarantee rights and, if so, whether any further action was warranted (having regard to the size of each relevant business, additional context surrounding each relevant website and consumer reports about each relevant business).

What potential contraventions of the ACL were uncovered?

As a result of the sweep, various statements in website policies, terms and conditions were identified that had the potential to mislead or deceive consumers in relation to their consumer guarantee rights.

A non-exhaustive summary of the problematic statements identified by the ACCC is set out below.

• Blanket restrictions on timeframes: Statements to the effect that, to be eligible for a refund under any circumstances, consumers must act within a specified timeframe.
• Blanket ‘no refund’ restrictions
  • All items: Statements to the effect that refunds are not permitted under any circumstances.
  • Sale or specialised items: Statements to the effect that sale or other specialised items cannot be exchanged or refunded under any circumstances.
  • Opened or used items: Statements to the effect that opened or used items cannot be exchanged or refunded under any circumstances.
• Blanket restrictions on the right to a remedy
  • Non–refundable delivery fees: Statements to the effect that, under any circumstances, paid delivery fees are non-refundable.
  • Processing, restocking or repair fee: Statements to the effect that, under any circumstances, returns will be subject to a processing, restocking or repair fee.
  • Avenues for remedy: Statements that refer to manufacturer warranties as the only avenue for consumers to access remedies.

What was the ACCC response?

The ACCC has issued warning letters to several Australian businesses to notify them of its concerns, provide education on the obligations owed by businesses under the ACL and improve compliance with the ACL more broadly.

Next steps for Australian businesses

This sweep functions as a timely reminder of the enduring ACCC enforcement priority regarding consumer guarantees. The ACCC has flagged that it will continue to actively monitor this area and has prompted consumers to report potential contraventions to ensure that enforcement action may be taken where necessary.

Australian businesses should closely review their policies, terms and conditions to ensure strict and ongoing compliance with the ACL.

If you wish to discuss any of the matters contained in this article, please contact David Grace, Adelaide Hayes or Lochlann Woodall.