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Important changes to the Fair Trading Act - will you be affected?

By Melissa Higham - 30 Jul 2014

The law now better reflects modern commercial and retail practices and seeks to bring our consumer laws into line with those of Australia. We set out eight key areas, with links for greater detail to the Commerce Commission's website.

  1. Contracting Out - There is now a limited ability to contract out of certain parts of the Act.
  2. Unsubstantiated representations - There is a prohibition on making unsubstantiated representations. For those in advertising, you will be happy to know that this does not mean that all "puffery" must stop. However, it does mean that any person making a representation must be able to show that they had reasonable grounds for believing the representation was true, at the time the representation was made. It is not sufficient to come up with evidence of truth at a later date.
  3. Product Safety - All product recalls must be notified to the Minister of Consumer Affairs and there are new provisions relating to Compulsory Product Recalls.
  4. Layby Sales - There is now a definition of what constitutes a "layby sale" and there are specified disclosure requirements for layby sales.
  5. Uninvited Direct Sales - Are now covered by the Act (which replaces the Door to Door Sales Act) and specifically includes telephone sales. There are now disclosure requirements for sales over $100.
  6. Extended Warranties - In addition to new disclosure requirements and rights to cancel, an extended warranty must clearly identify what additional rights a consumer is getting over and above their rights under the Consumer Guarantees Act.
  7. Unsolicited Goods and Services - Rules relating to unsolicited goods and services have been clarified.
  8. Auctions - Auctions are now specifically covered by the Act (including online auctions). The procedural aspects of auctions have also been clarified. Vendors must give notice of their status as traders and vendor bids must be clearly identified.

If you would like to know how any of the above changes may affect you, please email Melissa Higham.

Significant reform is also coming in relation to Unfair Contract Terms. This is due to come into force in March 2015. We will discuss these changes in upcoming blogs.


Melissa Higham


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