It’s been a torrid few weeks in national politics, with the Wentworth by-election robbing the Morrison government of its majority in the House of Representatives over the weekend.
With everything going on, you could be forgiven for missing a last minute dash from the government last week to pass consumer law reforms.
The changes have some important implications for businesses though, so let’s break things down.
Gift card changes go national
First up, remember when the NSW government brought in a minimum three-year expiry period on gift cards last year? Well, due to laws passed in Canberra last week, the change is going national.
From late-2019, gift cards sold anywhere in Australia will be required to have a minimum three-year expiry period.
The changes are expected to cost business $9.4 million each year in compliance costs and will require changes to computer and accounting systems, as well as the reprinting of cards themselves.
The government says it has introduced the change to protect consumers from the financial loss and disappointment of expired gift cards.
There’s a 12-month transition period before the law comes into effect, which gives retailers some time to clear old stock.
Crucially, businesses will need to carry outstanding gift cards on their books as liabilities for three years.
There are plans in the works to introduce additional reforms at a federal level to address some of the concerns businesses have about the changes, and the accounting implications, which SmartCompany understands will be progressing over the coming months.
Consumer law changes
A range of other law changes passed parliament late last week, following a 2015 review into Australian consumer law.
In essence, the changes seek to strengthen and clarify Australia’s consumer protections in a bid to make things easier for both businesses and customers.
There are quite a few changes, so let’s run through them.
ACCC product safety powers expanded
The ACCC’s powers in relation to product safety have been expanded. The regulator can now require retailers to provide information about unsafe products, including those from third-party suppliers, whereas previously they could only require suppliers to do this.
Practically, this means retailers could be required to provide information about unsafe products they are selling, even if their supplier is based overseas.
The ACCC and ASIC have also been given additional powers to undertake investigations of possible unfair contract terms under Australian consumer law.
Pricing regulations changed
Pricing regulation is changing. The single price provided to consumers must now include the price of pre-selected options.
The single price must be clearly displayed when selling goods and must be the minimum total cost of an item which includes all taxes, duties and extra fees — but not optional extras.
In practice, under the current rules, consumers who don’t deselect product options that are pre-selected can be charged a higher price than the single price (also called the headline price).
Currently, pre-selected options are classified as optional extras, but this is changing so they are included.
Consumer guarantees clarified
An exemption in consumer guarantee laws has been clarified so the requirement to provide a guarantee for the transport and storage of goods no longer extends to consumers in some circumstances.
Previously consumers could be exempt from consumer guarantees on transport or goods storage, particularly when they were ordering goods for personal and business use at the same time.
Laws around unsolicited agreements have also been clarified to make clear unsolicited consumer agreements apply when a dealer and a consumer meet away from a supplier’s business or trade premises.
The definition of unsolicited services has also been amended to include services which have not been requested and not supplied, effectively making it easier to enforce false billing provisions where a company has provided a service which was not asked for.
Unconscionable conduct, community services outsourcing and financial products
The definition of unconscionable conduct under Australian consumer law has been expanded to include situations where the party (referred to as the ‘person’) is a publicly listed company.
In practice, this primarily relates to the provision of financial services.
Courts can now require a party that has been found to have breached Australian consumer law to engage a third-party to perform their community service.
The Australian Securities and Investments Commission Act 2001 has been clarified to expand consumer law protections to financial products as well as financial services.
You can read more about the changes, including some examples of possible circumstances where the changes apply, here.