There are few more frustrating experiences for a consumer than a problem arising with a product or service they’ve spent their hard-earned money purchasing. From malfunctioning electronics to holiday experiences that don’t live up to the advertising, our first reaction is to seek some type of redress to help make things right.
In Australia, the Australian Consumer Law (ACL) is in place to safeguard the interests and rights of consumers. Coming into effect in 2011, the ACL is a national set of laws applicable in all states and territories providing consumers with certain guarantees and protections when purchasing goods and services.
The law sets out the duty of a seller to a buyer, whether the purchase was made in store or online, including that the goods sold are fit for purpose, must match their description and are of acceptable quality. Customers shown a sample of the good or service before the sale must be given products that reasonably match that sample. If the seller provided the buyer with information or made representations, and the buyer relied on these in making the purchase, the representations or information become implied terms in the contract between the parties and the seller is bound by them.
Likewise, if the buyer makes clear they want the product for a particular purpose, and then buys it based on the seller’s claims or expertise that it will be suitable for that purpose, the buyer may not be able to rely on ACL protections if it was unreasonable to rely on the seller’s skill or judgment.
Below we look in more detail at what a consumer can do when unhappy with goods and services they’ve purchased either in person or online.
Consumer guarantees under the ACL
As outlined above, a core protection within the ACL is the consumer guarantee that products and services of acceptable quality, fit for particular purpose and match the description of the product, or a sample or demonstration of it. This guarantee ensures that products and services purchased in Australia are of a standard quality that a reasonable consumer would expect. When a product or service fails to meet a guarantee, the consumer has a right to a remedy such as a refund, repair, replacement or exchange, compensation or cancellation of contract.
Consumer guarantees apply to a wide range of goods and services, from electronics and clothing to food and travel packages, and requires the supplier to rectify the situation. It should be noted consumer guarantees are different to warranties and apply automatically to transactions of goods and services. Warranties are extra promises that a business can choose to make on top of the consumer guarantees.
There are also occasions where a consumer may not be entitled to a remedy, including:
- simply changing their mind and deciding they do not like or cannot use the product;
- damaging or using goods in an unreasonable or unintended manner;
- discovering the goods or services are available more cheaply elsewhere;
- examining the goods before buying and not noticing an obvious fault;
- when a defect is drawn to the buyer’s attention before buying (such as goods labelled as seconds with their faults clearly marked);
- when the buyer did not rely upon, or unreasonably relied upon, the seller’s skill or judgment when choosing a product or service;
- when a buyer asked for a service to be done in a certain way against the advice of the business;
- when the problem with a service was caused by the actions of someone other than the business.
More detail on refunds, repairs, costs of returns
Where there’s a major problem with a product, such as it being unsafe, markedly different from the description or sample, or can’t be used for its normal purpose, for example, a business must offer the consumer a refund or replacement of the same type of product.
A refund should be for the full value of the product and be provided in the same form as the original payment, unless the parties agree otherwise. The buyer can also keep the product and receive compensation for its reduced value as a result of the fault. A consumer can also be entitled to compensation for extra damages and loss.
For a major problem with a service, a consumer can cancel a contract and refund, though the amount will vary depending on whether they have received any services under the contract before the problem arose. The buyer may also retain the contract but pay a lower price, reflecting the problem, or if they have paid upfront, get some money back, again depending on whether or not services have already been provided.
For more minor problems with goods or services, the business must fix the problem or repair the product for free and is not obliged to offer a replacement or refund if it chooses. A business that does not fix a minor problem within a reasonable amount of time enables the buyer to have the item repaired elsewhere, with the business obliged to meet the reasonable cost of repair; get a refund or replacement; keep the product or cancel the contract, and be compensated for the drop in value caused by the problem.
The seller is responsible for paying for reimbursement of freight costs for faulty products or collection of large or heavy items, with a reasonable time. If the seller confirms a problem with the product, it must reimburse the consumer for any reasonable return costs they have already paid. For this reason, the buyer should keep all receipts for transport or postage costs. The buyer may be responsible for the costs of collection if it’s later discovered there is no problem with the product.
In addition to seeking a refund or replacement, consumers have the right to claim compensation when a product or service does not meet the required consumer guarantees. Compensation can cover a range of damages, including:
Consequential loss – this includes additional costs incurred due to the faulty product or service. For instance, if your refrigerator breaks down and your groceries spoil, you may be entitled to compensation for the cost of the groceries.
Diminished value – if a product or service is not of an acceptable quality, you may experience a loss of value or enjoyment. In such cases, you can seek compensation for the diminished value.
Personal injury – if a product or service causes personal injury due to a defect or negligence, you have the right to claim compensation for medical expenses and other damages.
Aggravation and inconvenience – consumers are entitled to compensation for any aggravation and inconvenience caused by the failure of a product or service to meet consumer guarantees.
Consumer guarantees and online shopping
It should be noted the ACL is not limited to purchases from physical stores; it also applies to online transactions. When shopping online, consumers have the same rights as they do when buying from a brick-and-mortar store.
Exercising your rights under the ACL
If you have a problem with a product or service, reach out to the supplier as soon as possible. Explain the issue and your desired resolution, whether it’s a refund, replacement, compensation, or another remedy. Document all interactions with the supplier, including dates, times, and correspondence. This will be useful if you need to escalate the matter.
If the supplier does not provide a satisfactory solution, you can escalate the matter by contacting relevant consumer protection authorities, such as the Australian Competition and Consumer Commission (ACCC).
Unsure what to do? Contact our team at PD Law
Understanding your rights under the Australian Consumer Law is vital when something goes wrong with products and services you’ve purchased. It provides the framework for seeking refunds, replacements, compensation, and other remedies when products or services fail to meet the required standards. If you’re unsure what you need to do to, or how to go about having the problem fixed, contact our friendly team of legal professionals at PD Law. Our experts can provide clear and relevant advice on how to enforce your rights when you didn’t get what you paid for.