ACCC sweep of Aussie businesses uncover deceiving practices violating consumer law

The consumer watchdog has warned businesses against deceptive statements about customer rights after thousands of local businesses were found to be violating the law.

The ACCC has found that some businesses are misleading consumers about their rights.

The Australian Competition & Consumer Commission has warned businesses against making false or misleading statements around consumer rights after uncovering concerning business practices in a nationwide sweep of more than 2000 retail websites.

The review of Australian retail websites found some businesses to be using terms and conditions that may violate the Australian Consumer Law by misleading consumers about their rights to refunds, exchanges and returns.

It promoted the consumer watchdog to issue warning letters to several businesses who have since changed their messaging on their websites.

Several businesses were found to have potentially misleading statements in their website terms and conditions, such as setting time limits on returning faulty products, enforcing blanket ‘no refund’ policies on sale or specialised items, presenting manufacturer warranties as the sole option for remedies, and restricting consumer rights by making delivery fees non-refundable.

ACCC deputy chair Catriona Lowe. Picture: Supplied

ACCC deputy chair Catriona Lowe said consumers have guaranteed rights when buying products and services that cannot be taken away by misleading policies or restrictive conditions.

“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,” she 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.”

Ms Lowe said the ACCC issued warning letters to several businesses, prompting most to revise their policies and improve consumer guarantee messages to consumers.

“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.

“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.”

Mazda copped an $11.5m penalty for falsely denying consumers their rights in Australia. Picture: Mark Elias/Bloomberg

The ACCC warned that businesses must not falsely claim that refunds are never available, that sale or specialised items are exempt from consumer guarantees, that returns must be made within a restricted time frame, or that consumers must pay restocking or processing fees for faulty goods.

The ACCC has been pushing for stronger laws to penalise companies that fail to meet their consumer guarantee obligations. The federal government is working with state and territory consumer affairs ministers to introduce civil penalties for businesses that deny customers their legal rights.

In November, Koala Living was fined $56,340 for misleading refund policies, while in February, Mazda Australia copped an $11.5m penalty for falsely denying consumers their rights. The watchdog has also acted against Mosaic Brands for misrepresenting consumer rights across eight of its retail brands.

The ACCC is urging shoppers to report misleading refund and return policies to help ensure compliance.

Originally published as ACCC sweep of Aussie businesses uncover deceiving practices violating consumer law