Terms of Reference

Scope of the review

There will be three aspects to the review of the Australian Consumer Law (ACL):

1. The review will assess the effectiveness of the provisions of the ACL, whether these provisions are operating as intended, and address the risk of consumer and business detriment at an appropriate level of regulatory burden. These provisions include but may not be limited to:
   • general prohibitions against misleading or deceptive conduct, unconscionable conduct and unfair terms in consumer contracts;
   • prohibitions against specific ‘unfair practices’, including bait advertising, referral selling, unsolicited supplies of goods and services, pyramid selling and component pricing;
   • the system of statutory consumer guarantees;
   • the national product safety framework; and
   • enforcement powers, penalties and remedies applying under the ACL.
2. The review will also consider the extent to which the national consumer policy framework has met the objectives articulated by COAG. This will include:
   • assessing whether the existing institutional, administrative and regulatory structures underpinning the ACL, such as the ‘multiple regulator model’ and the coordinated enforcement, education, policy, research and advocacy approach of the Commonwealth and states and territories, are effective and efficient in supporting a single national consumer policy framework;
   • considering the interface between the national consumer policy framework and other legislation, its jurisdiction and reach, including whether there are legislative gaps, duplication or inconsistencies with industry-specific and other laws, including opportunities to reduce unnecessary compliance costs on businesses, individuals and the community while maintaining adequate levels of consumer protection; and
   • examining changes in consumer and business awareness of their respective rights, protections and obligations, including access to information about dispute resolution and consumer issues, since the implementation of the ACL.
3. The review will assess the flexibility of the ACL to respond to new and emerging issues to ensure that it remains relevant into the future as the overarching consumer policy framework in Australia.

Conduct of the review

The review will be conducted by Consumer Affairs Australia and New Zealand (CAANZ). In conducting the review, CAANZ will:

• undertake a public consultation process, including with government organisations, consumer representatives, businesses, the public and the Commonwealth Consumer Affairs Advisory Council (CCAAC) to seek their views and experiences of the national consumer policy framework;
• undertake the second Australian Consumer Survey to assess consumer and business experience of the ACL nationally since its implementation;
• commission an independent assessment of the opportunities to improve the ‘multiple regulator’ model, including seeking stakeholder feedback and applying a performance evaluation framework that is consistent with the Memorandum of Understanding agreed by ACL regulators; and
• examine the effectiveness of national guidance for businesses and consumers on the application, enforcement and administration of the ACL.

CAANZ will also:

• consider relevant developments in consumer policy overseas since the ACL was implemented;
• take into account relevant findings from other reviews including the Competition Policy Review and the Financial System Inquiry;
• will have regard to the application of consumer protection provisions as mirrored in the ASIC Act; and
• review the IGA’s operations and terms on behalf of the Council of Australian Governments.¹ CAANZ will provide to the Legislative and Governance Forum on Consumer Affairs an interim report in the second half of 2016 and a final report by March 2017. The final report will make findings and identify options to improve the efficiency and effectiveness of the ACL.

Legislative and Governance Forum on Consumer Affairs
12 June 2015

Background

The Australian Consumer Law (ACL) is the uniform Commonwealth, state and territory consumer protection law that commenced on 1 January 2011.² The Australian Securities and Investments Commission Act 2001 (the ASIC Act) generally mirrors the consumer protection provisions applying to financial products and services.

On 2 October 2008, the Council of Australian Governments (COAG) agreed to a new consumer policy framework, drawing on the recommendations of the Productivity Commission in its 2008 Review of Australia’s Consumer Policy Framework and best practice in state and territory consumer laws, including a provision regulating unfair contract terms.³

On 2 July 2009, COAG signed the Intergovernmental Agreement for the Australian Consumer Law (IGA), underpinning the establishment of a national consumer law. It created a national consumer policy framework consisting of a national consumer protection law, a national product safety regulatory and enforcement regime, and improved enforcement, cooperation and information sharing arrangements between Commonwealth, state and territory agencies.⁴

The IGA states that the objective of the national consumer policy framework is ‘to improve consumer wellbeing through consumer empowerment and protection, to foster effective competition and to enable the confident participation of consumers in markets in which both consumers and suppliers trade fairly’.⁵

This overarching objective is supported by six operational objectives:

• to ensure that consumers are sufficiently well-informed to benefit from and stimulate effective competition;
• to ensure that goods and services are safe and fit for the purposes for which they were sold;
• to prevent practices that are unfair;
• to meet the needs of those consumers who are most vulnerable or are at the greatest disadvantage;
• to provide accessible and timely redress where consumer detriment has occurred; and
• to promote proportionate, risk-based enforcement.⁶

The IGA provides that the enforcement and administration arrangements of the ACL will be reviewed within seven years of its commencement.⁷ It also provides that the Parties to the agreement will review its operations and terms after it has operated for seven years.⁸