Source: Australian Competition and Consumer Commission
The ACCC has conducted a sweep of more than two thousand Australian retail websites and has found some businesses using terms and conditions that may contravene the Australian Consumer Law (ACL).
As part of this sweep, business’ return policies and website terms and conditions were reviewed, some of which raised concerns as being potentially misleading for consumers.
“Our sweep has found numerous examples of practices that could potentially mislead or deceive consumers regarding their rights to exchange, refund or return a product,” ACCC Deputy Chair Catriona Lowe said.
“Under the Australian Consumer Law consumers have basic rights when buying products and services, known as consumer guarantees. These rights are separate from any warranties offered by a business and cannot be taken away by anything a business says or does.”
The sweep identified several potentially misleading statements in the terms and conditions of a number of the websites reviewed, including:
- imposing time-limits for returning a faulty product;
- imposing blanket ‘no refund’ conditions on sales or specialised items;
- referring to manufacturer warranties as the only avenue for consumers to claim remedies for faulty goods, and;
- placing restrictions on consumers’ right to a remedy, including stating that delivery fees paid for faulty items were non-refundable and charging restocking fees if customers returned faulty items.
Problematic statements found during the sweep included:
- “Items that have been opened and used cannot be exchanged or refunded”;
- “Made to order products cannot be returned”;
- “Sale items cannot be returned, exchanged or refunded” and;
- “In the unlikely event that your item arrives damaged or faulty, please notify the store within 30 days of delivery to receive a replacement”.
As a result of the sweep’s findings, the ACCC sent warning letters to several businesses whose returns policies or terms and conditions raised concerns under the ACL.
“Our action led to the majority of businesses changing or removing concerning statements from their websites and improving consumer guarantee messages to consumers,” Ms Lowe said.
“While we did identify some concerning practices during this sweep, we were pleased to find that many websites had information that advised consumers of their consumer guarantee rights under the Australian Consumer Law.”
Under the ACL, businesses should not be making statements, written or verbally, to the following effect about faulty products:
- No refunds are permitted under any circumstances;
- No refunds are provided for sale or specialised items;
- To be eligible for a refund, the consumer has a limited timeframe, from receipt of the good, to return the product;
- Returns will be subject to a processing, restocking or repair fee;
- No refunds are provided for opened or used items under any circumstances;
- Delivery fees are non-refundable;
- Customers must pay for delivery for returned items.
“The ACCC is committed to improving business compliance with consumer guarantees and will continue to actively monitor this area, and where appropriate, take enforcement action,” Ms Lowe said.
“We encourage all businesses to review their return policies and terms and conditions to ensure they comply with the law.”
Consumers should report any potentially misleading or deceiving statements to the ACCC: Report a consumer issue
Notes for editors:
There are nine consumer guarantees that apply to products. They include guarantees that a product sold to a consumer must be of acceptable quality, fit for any stated purpose, and match its description.
The three consumer guarantees that apply to services are that businesses must provide them using reasonable care and skill, they must be fit for any stated purpose, and they must be supplied within a reasonable time where the time is not otherwise agreed between the consumer and the business.
Businesses may offer other warranties, but these are extra promises that a business can choose to make in addition to the consumer guarantees. A warranty cannot replace, change or take away a consumer’s basic legal rights.
Depending on the nature of the problem, remedies can include a refund, a repair or replacement and/or compensation for reasonably foreseeable loss or damage caused by the failure to meet the consumer guarantee.
Consumer guarantees do not apply if the consumer simply changed their mind, found the product cheaper somewhere else, or decided they no longer liked it or had no use for it. Consumer guarantees also do not apply if a consumer misused the product in a way that caused the problem.
The ACCC has been advocating for law reform to the consumer guarantees provisions, and welcomes the Federal Government’s commitment to work with state and territory consumer affairs ministers to design proposed civil prohibitions and penalties for breaches of the consumer guarantee and supplier indemnification provisions of the ACL. This would introduce penalties for:
- businesses which fail to provide a remedy for consumer guarantees failures, when they are legally required to do so under the consumer guarantees, and
- manufacturers which fail to reimburse suppliers for consumer guarantees failures for which the manufacturers are responsible.
These amendments would significantly change business incentives to comply with their consumer guarantee obligations under the ACL, as well as more effectively supporting consumers in securing their statutory consumer guarantee rights.
Background
The ACCC conducted a sweep of retail websites operating in Australia. The ACCC then reviewed statements to assess whether the statement sought to restrict consumers’ consumer guarantee rights, and if so whether any further action was warranted, having regard to the size of the business, additional context on the website surrounding the statement, and consumer reports about those businesses.
As a result, numerous website statements that raised concerns under the ACL were identified. The ACCC subsequently sent warning letters to several businesses to notify them of our concerns, educate them on their obligations under the ACL, and improve compliance with the ACL.
Improving industry compliance with consumer guarantees is one of the ACCC’s compliance and enforcement priorities and has been a priority for a number of years. In 2024/25, the ACCC is particularly focused on consumer guarantees relating to consumer electronics and targeting misconduct by retailers in connection with delivery timeframes.
In November 2024, furniture and homewares retailer Koala & Tree Pty Ltd, trading as Koala Living, paid penalties of $56,340 after the ACCC issued it with three infringement notices for making false or misleading statements about consumers’ rights to remedies for faulty products, including for representing that a consumer’s right to seek remedies for faulty products was limited to 72 hours.
In March 2024, the ACCC instituted Federal Court proceedings against Mosaic Brands Limited for allegedly misrepresenting consumer guarantee rights in the terms and conditions published on eight of its brands websites and making false or misleading representations to consumers about delivery times.
In February 2024, the Federal Court ordered Mazda Australia Pty Ltd to pay $11.5 million in penalties for engaging in misleading and deceptive conduct and making false or misleading representations to nine consumers about their consumer guarantee rights.
MIL OSI News –