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New national consumer laws to take effect on January 1

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Media Release

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New consumer laws, which commence today and replace state based laws, are an important step forward in protecting consumers and small businesses, according to national law firm Slater and Gordon. 

Last year the Federal Government passed the Australian Consumer Law, which will see the Trade Practices Act 1974 changed to the Competition and Consumer Act 2010. These laws are replacing the various state laws which presently govern consumer rights and protections.

Slater and Gordon, commercial lawyer James Higgins, said the new national approach to consumer protection was a major milestone.

"The legislation delivers the biggest change to consumer laws in 35 years and there are many positive reforms in the new laws," Mr Higgins said.

"The legislation will mean that consumers around the country are covered are able to go to one area of law to ascertain their rights about critical protections like misleading and deceptive conduct, unconscionable conduct, unfair contract terms, various unfair practices and consumer guarantees.  

"The new laws provide clarity as opposed to the previous system where different protections existed in different states and territories and there were also commonwealth laws."  

"It ends the maze and duplicity of state and territory laws."

Mr Higgins said that in areas such as misleading and deceptive conduct by testimonial advertising, the new laws would help consumers by placing the onus on the person making the allegedly misleading representation to call evidence to the contrary.  If they do not, the representation will be deemed to be misleading.  

"In the area of consumer guarantees, a single set of more readily understandable guarantees will replace the many different implied conditions and warranties for goods and services that have existed around the country to date.  

"The remedies available for breach of consumer protections are also set out in legislation rather than relying on previous case law to identify the remedy available. This will simplify access to justice for consumers and should make it easier for consumers to protect themselves against rogue operators."

Mr Higgins said because the Senate had forced changes to the original legislation and there were still some gaps in protection for consumers and small businesses that needed to be closed in the future.  

"Important areas were left for future consideration including provisions dealing with ’prohibited terms’, the inclusion of small businesses under the unfair contract laws and greater insurance contract protections.

"Consumer protection is vital in modern life. A young person today is likely in today’s world to be drowning in multiple consumer contracts before they know what has happened and they are extremely vulnerable to the effect of agreements they do not understand. Similarly the elderly or migrant communities are frequently hurt by unfair contracts with few options for redress."

"It is hoped these areas will be dealt with in the future," Mr Higgins said. 
The new national laws will become effective today, 1 January 2011. Some parts of the new laws, such as the unfair contract terms provisions, commenced on July 1, 2010.