The Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010 (“the Act”) was assented to on 1 April 2010, amending the Trade Practices Act 1974 (Cth) (“the TPA”) and the Australian Securities and Investments Commission Act 2001 (Cth).

The Act became law on 15 April 2010, with the exception of the unfair contract provisions, which will become operative on or after 1 July 2010.

In the interests of brevity, this article will discuss only the key operative amendments to the TPA, which can be summarised as follows:

• new penalties of up to $1,100,000 for corporations and $220,000 for individuals that engage in unconscionable conduct; pyramid selling; or unfair practices in the course of sale and/or supply of goods and services. 
• Courts may now make an order to disqualify a person from managing a corporation on application from the Australian Competition and Consumer Commission (“the ACCC”).
• parties that makes claims or representations with respect to the supply of goods or services; land or employment may be issued with a notice from the ACCC requiring substantiation of the claim or representation.
• on application from the ACCC the Court may make an order for redress of loss suffered by a party that is not involved in proceedings about the alleged contravention. 
• the ACCC may issue infringement notices as an alternative to commencing proceedings, within 12 months after the day of the alleged contravention. The maximum penalty under an infringement notice is $6,600.00 for a corporation and $1,320.00 for an individual.
• the ACCC may also issue a public warning notice if it has reasonable grounds to suspect a contravention; and one or more persons have or are likely to suffer detriment as a result of the contravention and it is satisfied that it is in the public interest to do so. 

(“the Amendments”)

Final words

The Amendments should act as a significant deterrent to unscrupulous business operators due to the severity of the new penalties.

Prudent business operators should now review their advertising and marketing material and take all reasonable steps to ensure their staff and agents are aware of the Amendments and do not engage in unconscionable conduct or make misleading claims or representations on behalf of the business. 

Further commentary will be provided once the unfair contract provisions of the Act become law.