Proposed reforms to the Australian Consumer Law set to address unfair trading practices

Earlier this month, the Prime Minister’s office announced that it will legislate a ban on unfair trading practices in Australia, aiming to “stop businesses ripping off Australians” and protect consumers from “tricky tactics that make it difficult to end subscriptions or add hidden fees to purchases”, which can distort purchasing decisions and put pressure on the cost of living.

As it currently stands, the Australian Consumer Law prohibits specific misleading or deceptive conduct such as bait advertising and pyramid schemes. However, the proposed reforms may expand the legal framework to cover a wider variety of unfair conduct that the government considers currently escapes regulation, including conduct which is:

• harmful but does not reach the legal threshold for unconscionable conduct
• not misleading or deceptive but distorts consumer choice by creating confusion or hiding or omitting relevant information
• not captured by the unfair contract term provisions as harmful terms in non-standard form contracts or unfair conduct engaged in pursuant to a contract term that is, on the face of it, a reasonable contract term.

The ACCC has been publicly supportive of the proposed reforms to address business conduct which it says is “unlikely to breach the Australian Consumer Law but causes real harm to consumers”.

What might constitute an unfair trading practice?

The government has not yet released any draft legislation for consultation. However, in its media statement, it said that the amendments will address a range of practices, including:

• ‘subscription traps’ that use arduous and confusing steps to make cancelling a subscription difficult
• ‘drip pricing’ practices where fees are hidden or added throughout the stages of a purchase
• deceptive and manipulative online practices that aim to confuse or overwhelm consumers, omit or hide material information, or create a false sense of urgency or scarcity – this can include warnings that a customer only has limited time to purchase a product
• dynamic pricing where a product’s price changes during the transaction process
• requiring consumers to set up an account and provide unnecessary information to make an online purchase
• where a business makes it difficult for a consumer to contact them when they have a problem with their product or service.

The government has indicated that it will have a final reform proposal in the first half of 2025, and we will provide updates as soon as the report is available.

If you have any questions about the proposed reforms in the meantime, please get in touch with our team below.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Joanne Jary

Sarah Butler

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