Ensuring Consumer Law Compliance under the Australian Consumer Law (ACL) is a critical responsibility for businesses. The ACCC has increased its focus on misleading practices, especially refund policies and consumer rights. Companies that breach the ACL face penalties, reputational harm, and loss of trust. This article outlines ACL obligations and recent ACCC enforcement actions. It also provides practical guidance for businesses to stay compliant.
The Importance of Consumer Law Compliance
The ACL provides consumers with guarantees that goods and services will be of acceptable quality, fit for purpose and match the description given. When businesses fail to meet these guarantees, the law requires them to provide repairs, replacements, or refunds. Importantly, any store policy or contractual term that attempts to exclude these rights is invalid. Consumer Law Compliance under the ACL is therefore essential not only to avoid financial penalties but also to maintain consumer confidence and brand reputation.
Non-compliance with consumer law has serious consequences. The ACCC investigates and takes action against businesses that mislead consumers about their rights. Recent years have seen a substantial increase in penalties, with fines reaching into the millions for serious breaches. For businesses, strict adherence to consumer law is not simply a legal obligation, it is a crucial aspect of good business practice.
ACCC’s Recent Enforcement Actions
The ACCC has taken several enforcement actions against businesses that engage in misleading practices. In early 2025, the ACCC conducted a review of numerous retail websites, identifying several examples of refund policies that were misleading. Many of these sites contained statements that appeared to restrict consumer rights to exchange, refund or return products that failed to meet the guarantees. This review resulted in warning letters to multiple businesses and corrective action in many cases.
One high-profile case involved an online fashion retailer that implemented a policy limiting refunds for faulty products to a strict 30-day period. This policy did not consider that the ACL provides remedies for faults that may appear after this period. The ACCC determined that the policy misled consumers about their rights and imposed a penalty that served as a warning to other businesses. Similarly, a case involving a wearable technology company revealed that statements claiming consumers had no right to a remedy after the expiration of a manufacturer’s warranty were unlawful. These enforcement actions confirm that businesses must provide clear and accurate information about consumer rights.
The ACCC has also targeted misleading practices in the automotive sector. In one case, the ACCC found that a major car manufacturer repeatedly denied refunds or replacements for vehicles with major faults. The company breached the ACL by insisting on repairs instead of offering a refund or replacement. The court imposed a penalty on the manufacturer, reinforcing the ACCC’s commitment to protecting consumer rights from restrictive policies.
Key Obligations on Refunds, Warranties and Consumer Guarantees
The ACL sets out clear obligations regarding refunds, warranties and consumer guarantees. If a product or service fails to meet consumer guarantees, the business must provide an appropriate remedy. For a minor fault, the business may offer a repair; however, for major faults, consumers can choose a refund or replacement. Any policy that restricts these remedies is likely misleading.
It is important to note that while businesses may offer a “no refund” policy for change of mind purchases, this does not apply when a product is faulty. Any advertisement or term that suggests that there is no right to a refund or replacement for defective products is in direct contravention of the ACL. Similarly, businesses that impose additional charges on consumers seeking a remedy, such as restocking fees or penalties on delivery fees, are likely acting unlawfully.
The ACL also makes clear that express warranties offered by businesses operate alongside the consumer guarantees. A business cannot suggest that a consumer’s only remedy is through an express warranty when the ACL provides additional rights. Statements that imply that consumer rights end with a manufacturer’s warranty are misleading and have been the subject of ACCC enforcement actions.
Practical Steps for Achieving Compliance
Businesses should undertake a comprehensive review of all customer-facing policies, including online terms and conditions, in-store signage and promotional materials. It is essential to remove any language that may be interpreted as restricting consumer rights under the ACL. Instead of blanket statements that deny refunds, businesses should clarify that their policies apply to change-of-mind returns only and that consumers retain full rights when it comes to faulty products.
Staff training is also vital. Employees should be educated on the consumer rights provided under the ACL and be prepared to explain these rights to customers. Consistent, clear communication regarding consumer guarantees helps prevent misunderstandings and reduces the risk of non-compliance.
Businesses should implement clear procedures for handling complaints and determining when a product fault is considered major or minor. Keeping detailed records of customer complaints and the steps taken to address them may provide valuable evidence of a business’s commitment to compliance should the ACCC decide to investigate.
Finally, it’s important for businesses to keep informed about the latest guidance and updates from the ACCC. Recent enforcement actions serve as important reminders of the kinds of practices that attract regulatory attention. By regularly reviewing and updating internal policies in line with ACCC guidelines, businesses can ensure ongoing compliance and avoid potential legal pitfalls.
Conclusion
Consumer Law Compliance is a fundamental requirement under the ACL. The recent enforcement actions taken by the ACCC highlight the significant penalties and reputational risks associated with misleading refund policies and other deceptive practices. Businesses must ensure that their policies reflect the full rights afforded to consumers and that staff are trained to communicate these rights clearly. Regular review of internal procedures and proactive adherence to ACCC guidelines are essential in maintaining compliance and safeguarding against potential legal challenges.
Jake McKinley notes that this article is written for the purpose of providing generalised information and not to provide specialised legal advice. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.
