Recent amendments to the Fair Trading Act 1987 (NSW) are now in force. The amendments relate to the supply of goods or services to consumers located in NSW, and require that:
These new disclosure obligations are intended to increase transparency and competition, without imposing a significant burden on businesses. Importantly, they may apply to businesses outside of NSW, including online stores. Those based in SA ought to ensure they are aware of the obligations and are making any necessary disclosures, if the above criteria is satisfied.
Corporations found to have contravened the disclosure obligations may face a $110,000 penalty, whereas the penalty is $22,000 for individuals. In addition, NSW Fair Trading may issue penalty notices for each offence.
Who is a “consumer”?
The obligations only apply to supplies to “consumers”, as defined in the Australian Consumer Law (ACL). If the relevant customer or client does not satisfy the meaning of “consumer”, disclosure is not mandatory (unless required by some other law or regime).
Individuals or businesses will be a consumer if they:
However, they will not be a consumer if they acquire goods for the purposes of resupply or transformation into another product for sale.
What does “substantially prejudice” mean?
Terms which could “substantially prejudice” the interests of a consumer and therefore might require disclosure include those that:
What are “reasonable steps”?
NSW Fair Trading has published a guideline which sets out some tools to assist businesses take reasonable steps for the purposes of compliance. These include:
This list is not exhaustive and exactly how disclosure is made will depend on a variety of factors, such as the nature of the business, the product or service and the customer.
If you think your business might be affected or if you would like to discuss the above, please contact us.
This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.
Annabel Nettle, Lawyer in our Disputes Team
Phone: +61 8 8210 2291