2011 has been a big year for businesses with the introduction of the Competition and Consumer Act 2010 (Cth) and the accompanying requirements of the new Australian Consumer Law (ACL). The latest development in this process is the impending introduction of Regulation 90 of the Competition and Consumer Regulations, which will have particular importance for those who manufacture, supply or import goods.
Set to commence on 1 January 2012, Regulation 90 requires all manufacturers, suppliers and importers who offer warranties to comply with new requirements. The new requirements are aimed to assist customers in understanding the process of claiming under a warranty, as well as the benefits given by the warranty.
AMENDING EXISTING WARRANTIES
Regulation 90 lists the items that must be included in a defects warranty clause. The first step in becoming compliant is to review your existing warranties, especially warranties against defects. The aim is for clear and concise statements addressing the obligations of the entity giving the warranty, the actions a customer must take to ensure eligibility to claim the warranty, the contact details of the entity giving the warranty including the address to which a claim can be sent, and particulars such as any time limitations which affect the warranty. Also required is that it be made clear who is responsible for shouldering the costs associated with claiming the warranty. The consumer should also be made aware of the existence of other rights and remedies which operate alongside the warranty.
The Regulation also sets out compulsory, standard wording that must accompany all warranties for defects. The prescribed text reflects the consumer guarantees that operate under the Australian Consumer Law.
For suppliers in particular, an essential step will be a review of packaging and warranty material. Not only must the above issues be addressed, but attention should be paid to the requirements in the Regulation that certain information be ‘prominently’ displayed.
WHAT IS THE TIME FRAME FOR COMPLIANCE?
From 1 January 2012 businesses that provide a warranty that does not comply with Regulation 90 will be guilty of an offence. Businesses that fail to comply are liable for fines of up to $50,000 per offence, and $10,000 for individuals.
Although the Regulation does not come into force until next year, it would be wise to take steps to becoming compliant now. This is because for many businesses becoming compliant may not only be costly, but also entail a significant time commitment. Perhaps more importantly, however, is that goods being sold now may only be available in the New Year – thus compliance now is vital in ensuring full compliance in the future. As non-compliance with Regulation 90 attracts fines, early planning will also prove cost effective for businesses and individuals alike.
Set to commence on 1 January 2012, Regulation 90 requires all manufacturers, suppliers and importers who offer warranties to comply with new requirements. The new requirements are aimed to assist customers in understanding the process of claiming under a warranty, as well as the benefits given by the warranty.
AMENDING EXISTING WARRANTIES
Regulation 90 lists the items that must be included in a defects warranty clause. The first step in becoming compliant is to review your existing warranties, especially warranties against defects. The aim is for clear and concise statements addressing the obligations of the entity giving the warranty, the actions a customer must take to ensure eligibility to claim the warranty, the contact details of the entity giving the warranty including the address to which a claim can be sent, and particulars such as any time limitations which affect the warranty. Also required is that it be made clear who is responsible for shouldering the costs associated with claiming the warranty. The consumer should also be made aware of the existence of other rights and remedies which operate alongside the warranty.
The Regulation also sets out compulsory, standard wording that must accompany all warranties for defects. The prescribed text reflects the consumer guarantees that operate under the Australian Consumer Law.
For suppliers in particular, an essential step will be a review of packaging and warranty material. Not only must the above issues be addressed, but attention should be paid to the requirements in the Regulation that certain information be ‘prominently’ displayed.
WHAT IS THE TIME FRAME FOR COMPLIANCE?
From 1 January 2012 businesses that provide a warranty that does not comply with Regulation 90 will be guilty of an offence. Businesses that fail to comply are liable for fines of up to $50,000 per offence, and $10,000 for individuals.
Although the Regulation does not come into force until next year, it would be wise to take steps to becoming compliant now. This is because for many businesses becoming compliant may not only be costly, but also entail a significant time commitment. Perhaps more importantly, however, is that goods being sold now may only be available in the New Year – thus compliance now is vital in ensuring full compliance in the future. As non-compliance with Regulation 90 attracts fines, early planning will also prove cost effective for businesses and individuals alike.
If you require more information on how you can ensure compliance with Regulation 90, please contact Geoffrey Roberson on 9635 8266 or connect@champion.com.au
LAUREN DRAGICEVICH AND CELESTE WHITE
Law Clerks,
Litigation and Dispute Resolution
