Does The Australian Consumer Law Contain Criminal Offences?
Breaching Australian Consumer Law can result in criminal offences. However, only severely serious conduct will amount to a criminal offence.
Certain provisions in the Australian Consumer Law contain criminal offences. However, the range of conduct that attracts a criminal offence is significantly smaller in comparison to the conduct that attracts civil penalties and fines. As a business operator, it is important to know what type of conduct may amount to a criminal offence.
What is the Australian Consumer Law?
Australian Consumer Law is important for both business operators and consumers. It provides the national standard that all Australian businesses must abide by. It also provides protection to consumers for any breaches of these standards. These national standards and rules relate to:
- General Protections: e.g. a ban on misleading and deceptive conduct, unconscionable conduct and unfair contractual terms in consumer contracts,
- Specific Protections: e.g. a ban on unfair practices, provision of safety and liability for consumer goods, standards for dealing with consumer transactions, enforcement of national information standards,
- Criminal Offences: Penalties or imprisonment may apply to certain breaches of the law,
- Enforcement and Remedies: e.g. where a consumer may seek a refund, replacement or repair of goods.
Australian Consumer Law also contains consumer guarantees. These consumer guarantees protect consumers from unsafe goods, misleadingly labelling, hidden fees and protects consumers against warranties given by businesses.
Australia Consumer Law is also referred to as the Competition and Consumer Act 2010 (Cth). These laws are found in Division 2 of the Act.
Breaches of Australian Consumer Law that may be criminal offences:
Put simply, a criminal offence occurs where someone breaks the law and offends the community or a single person. The majority of breaches by businesses of Australian Consumer Law will not amount to a criminal offence. However, there are a few that will. Therefore, criminal sanctions and proceedings may apply. However, this depends on the seriousness of the conduct or the breach of law.
The following are examples of conduct or breaches that may amount to a criminal offence:
Engaging in cartel conduct amounts to criminal conduct under Australian Consumer Law and therefore attracts criminal charges.
Cartel conduct occurs when competitive businesses work together in a way that prohibits competition, cheats consumers and other businesses and also severely restricts economic growth. This is also called anti-competitive conduct. The cartel conduct must be sufficiently serious to attract criminal sanctions. If it is not sufficiently serious, then civil penalties will likely apply.
Engaging in cartel conduct is the only offence that can result in imprisonment. The maximum term of imprisonment for this conduct is 10 years. Alternatively, large criminal fines may apply. The maximum criminal penalty that may apply to an individual is $360,000. The maximum criminal penalty that may apply to corporation is either $10 million, 3 times the corporations gain from the cartel conduct, or 10% of their turnover.
False or Misleading Conduct:
False or misleading conduct can be a criminal offence, but not always. The conduct must be extremely serious it to be a criminal offence.
Conduct that amounts to false or misleading conduct may include the making of incorrect statements or making statements that create a false impression to consumers. This can include statements relating to advertising, product packaging and statements made by the corporation including website testimonials. Breaching provisions relating to false or misleading conduct may amount to a criminal offence if the breach is severely serious. The maximum penalty for a corporation engaging in false or misleading conduct is $1.1 million.
Breach of Consumer Guarantees:
A breach of consumer guarantee can also be a criminal offence.
Even though it is a criminal offence, it does not result in a criminal penalty or imprisonment. Alternatively, this conduct results in a court order, called an injunction. The effect of an injunction is to stop the businesses breaching behaviour. To learn more about what an injunction is, see here.
Breach of Product Safety:
The sale and supply of unsafe products can also result in a criminal offence.
Unsafe products include products that do not meet national safety standards, do not meet labelling standards, defective products and banned or illegal products. Selling and supplying unsafe products may attract a penalty of up to $1.1 million for corporations or up to $220,000 for individuals.
Unsolicited Consumer Agreements:
This may amount to a criminal offence.
The most common forms of unsolicited consumer agreements include: door-to-door selling, telemarketing or sales agents approaching consumers in public places, such as a shopping centre. However, not all unsolicited consumer agreements are criminal offences. They can be criminal offences when, for example, agents demand payments for products or services you never actually bought. If an agent fails to comply with the requirements for unsolicited consumer agreements then the maximum criminal penalties of $50,000 for corporations, or $10,000 for individuals may apply.
There is certain conduct in the Australian Consumer Law that amounts to a criminal offence. However, the conduct must be sufficiently serious. If a business engages in cartel conduct, misleading and deceptive conduct, unsolicited consumer agreements or breaches consumer guarantee or product safety, criminal offences can apply. The national standards in Australian Consumer Law aim to protect consumers against a businesses illegal conduct.
Mai is a Legal Tech Intern at Lawpath, working as part of the Content Team. She is in her final year of a Bachelor of Laws degree at the University of Wollongong. She is interested in Business and Employment Law.