THE consumer laws (ACL) provide various protections and set standards of business conduct in commercial transactions.
Chapter 2 deals with standards of business conduct aimed at protecting consumers, including a general prohibition on engaging in misleading or deceptive conduct and unconscionable conduct. There are also unfair contract term protections for consumer contracts.
Section 18 of the ACL prohibits misleading or deceptive conduct and captures both conduct that is, or is likely to, mislead or deceive. The scope is therefore quite extensive, capturing both intentional and unintentional acts and sets a high standard of conduct in commercial transactions.
There are penalties for breaching the prohibition and businesses also leave themselves open to legal claims for damages.
The highest penalty in Australia for engaging in misleading conduct was made in late 2016. It relates to the misleading packaging of Nurofen pain products, which referred to the medication targeting specific pains. You may recall previously seeing Nurofen for “back pain” or “knee pain” on the shelves and wondered why the Nurofen packaging reverted to non-specific pain areas.
Despite the different specific pains packaging, the Nurofen tablets all had the same type and amount of active ingredients. The company responsible was fined $6 million. Interestingly, the company was initially fined $1.7 million, but on appeal to the full Federal Court the Australian Competition and Consumer Commission successfully had the penalty increased to $6 million.
Until next week – Keep it Legal!
Katie Caldow
kcaldow@walkerpender.com.au
* The legal information in this article is of a general nature only and not intended to be legal advice to rely upon.