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ACCC Finds Widespread Consumer Law Breaches

ACCC deputy chair Catriona Lowe

A sweep of 2000 Australian retail websites by the country’s competition regulator has uncovered businesses using terms and conditions that may contravene Australian law.

The Australian Competition and Consumer Commission says some of the business’ return policies and website terms and conditions raised concerns as being potentially misleading for consumers.

“Our sweep has found numerous examples of practices that could potentially mislead or deceive consumers regarding their rights to exchange, refund or return a product,” ACCC Deputy Chair Catriona Lowe said.

“Under the Australian Consumer Law consumers have basic rights when buying products and services, known as consumer guarantees. These rights are separate from any warranties offered by a business and cannot be taken away by anything a business says or does.”

The ACCC says some businesses sought to impose time-limits for returning a faulty product, a blanket ‘no refund’ conditions on sales or specialised items, references to manufacturer warranties as the only avenue for consumers to claim remedies for faulty goods, and restrictions on consumers’ right to a remedy, and statements that delivery fees paid for faulty items were non-refundable. The businesses said they would charge restocking fees if customers returned faulty items.

Problematic statements include: “Items that have been opened and used cannot be exchanged or refunded”, “Made to order products cannot be returned”, “Sale items cannot be returned, exchanged or refunded”, and “in the unlikely event that your item arrives damaged or faulty, please notify the store within 30 days of delivery to receive a replacement”.

The ACCC says it has sent warning letters to some businesses whose returns policies or terms and conditions raised concerns under Australian competition law.

“Our action led to the majority of businesses changing or removing concerning statements from their websites and improving consumer guarantee messages to consumers,” Ms Lowe said.

There have been prosecutions as well.

In November 2024, furniture and homewares retailer Koala & Tree Pty Ltd, trading as Koala Living, paid penalties of $56,340 after the ACCC issued it with three infringement notices for making false or misleading statements about consumers’ rights.

In March 2024, the ACCC instituted Federal Court proceedings against Mosaic Brands Limited for allegedly misrepresenting consumer guarantee rights in its terms and conditions.

In February 2024, the Federal Court ordered Mazda Australia Pty Ltd to pay $11.5 million in penalties for engaging in misleading and deceptive conduct and making false or misleading representations to nine consumers about their consumer guarantee rights.

Ms Lowe praised other businesses who explicitly supported Australian consumer rights. “While we did identify some concerning practices during this sweep, we were pleased to find that many websites had information that advised consumers of their consumer guarantee rights under the Australian Consumer Law.”

“The ACCC is committed to improving business compliance with consumer guarantees and will continue to actively monitor this area, and where appropriate, take enforcement action,” Ms Lowe said.

“We encourage all businesses to review their return policies and terms and conditions to ensure they comply with the law.”

Consumers are being encouraged to report any potentially misleading or deceiving statements to the ACCC.



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