What the new consumer law changes mean for your rights

Australia’s consumer rights and protections are set for a major shake-up from 1 July this year and it means that many people could be much better protected from unscrupulous business practices.

One of the main changes is in regard to the thresholds for what constitutes a consumer, and it changes a limit that has been in place since 1986.

Currently a person is only considered a consumer if they acquire goods or services for $40,000 or less. This threshold has been in place since 1986, so is now well and truly out of date.

From 1 July that monetary threshold will increase to $100,000, which will result in a broader range of goods and services being protected under the Australian Consumer Law.

The other areas likely to change in 2021 include changes to what constitutes a major failure and an expansion of protections from unfair contract terms.

While courts have already interpreted a major failure to include multiple minor failures, there is a proposed amendment that will make this clearer.

Minter Ellison associate Natasha Simonds explains that the change is designed to reduce the costs and time associated with disputes involving multiple minor failures.

“This change would mean that a failure to comply with a consumer guarantee would be considered to be a ‘major’ failure if (i) it is one of a series of non-major failures, and (ii) a reasonable consumer would not have acquired the good or service if they were aware of the nature and extent of those non-major failures taken as a whole, at the time of the supply,” Ms Simonds explained.

The failures do not need to occur in a similar period of time, relate to the same reoccurring issue or result in the same type of problem.

There is also no specified number of non-major failures required to amount to a major failure.

“This proposal is intended to clarify the law so that consumers can establish a major failure where, for example, there are multiple issues with a vehicle that, collectively, would be enough to deter a reasonable consumer from buying it,” Ms Simonds said.

The proposed changes to the unfair contract terms protections came about late last year when Commonwealth, state and territory consumer affairs ministers agreed to strengthen protections under the Australian Consumer Law.

The proposed changes include making unfair contract terms unlawful and giving the courts the power to impose a civil penalty.

One other major change is that insurance contracts will become subject to the unfair terms legislation for the first time from April 2021.

Do you believe Australian consumers have enough protection from unscrupulous businesses under the law? What changes would you like to see to consumer protections?

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Written by Ben


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