Avoiding unfair business practices under Australian Consumer Law
Under Australian Consumer Law, there are a number of sales practices that are illegal for businesses to engage in when dealing with their customers. Unfair business practices encompass a wide range of activities, such as misleading or false statements and deceptive conduct.
Here are some examples of illegal activities that you should be aware of as a business owner in order to avoid harsh penalties.
False or misleading statements:
It is unlawful for a business to make false or misleading representations about their goods or services that they are supplying, offering to supply, or promoting. For example, businesses may not make false or misleading statements about the standard or quality of goods or services, testimonials from other customers about the goods or services, or their price. While it will depend on the circumstances of each particular case, the maximum fine for this offence is $220,000 for individuals and $1.1 million for a body corporate.
Accepting payment without intending to supply:
Payment cannot be accepted for goods and services if businesses do not intend to supply, they intend to supply materially different goods or services, or if they are aware that they will not be able to supply the goods or services in a timely manner. However, this is not intended to affect businesses who demonstrate a genuine attempt to meet supply agreements. For example, a business may avoid prosecution if the failure to supply was due to something beyond its control.
Businesses are prohibited from acting in a manner that is against good conscience. For conduct to be classified as unconscionable, it is extremely harsh or aggressive where one party exploits another and must be more than just unfair or unreasonable. Examples of this conduct include coercing a person to sign a blank or one-sided contract, failing to disclose contractual terms, or taking advantage of low-income consumers by misleading them about prices. Whether certain conduct is deemed to be unconscionable will depend on the particular circumstances involved and may require legal action. There is a list of factors that courts may consider, including the relative bargaining strength of the parties, and the extent to which the parties acted in good faith.