From 1 July next year, the definition of ‘consumer’ under the Australian Consumer Law (ACL) will change.
Currently, the value threshold for businesses in determining whether a customer is a ‘consumer’ under the ACL is $40,000. The Treasury Laws Amendment (Acquisition as Consumer – Financial Thresholds) Regulations will increase the monetary threshold to $100,000.
The change will apply in relation to goods and services acquired on or after 1 July 2021 and will also apply to the Australian Securities and Investments Commission Regulations, which contain similar consumer protection provisions for financial products and services.
What does this mean for businesses?
Essentially, the increased threshold means that businesses that have previously been exempt from the consumer guarantee regime may need to reassess if this is still the case.
Where a customer falls within the meaning of a ‘consumer’ in the ACL, they have the benefit of certain non-excludable rights and guarantees, including that goods are of an acceptable quality, fit for purpose and match the description given of them, and that services will be provided with acceptable care and skill, be fit for purpose and delivered within a reasonable time. A failure by the business vendor to satisfy these requirements will entitle a consumer to various remedies, including repair, replacement, refund, cancellation and compensation.
Businesses selling goods or services valued at over $40,000 should take steps to determine if the changes will apply to them. If they do, you should:
- review your policies for sales, refunds and faulty goods;
- review terms and conditions of sale or supply; and
- undertake compliance training with your staff and ensure that they know your business’ obligations in regard to consumer rights and remedies.
Businesses should use the next nine months wisely to ensure that they are prepared for the change. If you would like to discuss how your business may be impacted, please contact Macfarlane Law for expert advice on consumer law.
