Consumers

Consumers is one of seven options in Section III. If you study it, you answer one 25-mark extended response (about 1,000 words) on it. The questions almost always ask you to evaluate the effectiveness of the law in protecting consumers or achieving justice.

• The nature of consumer law: who a consumer is, the historical shift from "buyer beware" to consumer protection, contracts, and statutory protections.
• Responses: legal measures (legislation, government agencies, tribunals, courts) and non-legal measures (consumer organisations, the media, business self-regulation, self-help), and their effectiveness.
• Contemporary issues: the syllabus asks you to examine issues such as credit, the impact of technology and new marketing practices.

The law below is Commonwealth and NSW law as at 2026.

A consumer is a person who acquires goods or services for personal, domestic or household use. Under the Australian Consumer Law (ACL), a person is also a consumer if the goods or services cost $100,000 or less (from 1 July 2021, up from $40,000), whatever their use.

Caveat emptor ("let the buyer beware") was the old common law approach: buyers had to look after themselves. As mass production, advertising and credit grew, governments recognised the imbalance of power and information between businesses and consumers. Key steps:

• Trade Practices Act 1974 (Cth): the first national consumer protections.
• Australian Consumer Law (ACL): Schedule 2 of the Competition and Consumer Act 2010 (Cth), in force from 1 January 2011. A single national law, applied in NSW by the Fair Trading Act 1987 (NSW).

A contract is a legally enforceable agreement. Essential elements:

1. Offer and acceptance.
2. Consideration (something of value exchanged).
3. Intention to create legal relations.
4. Capacity (minors and some people with impaired capacity have limited capacity).
5. Genuine consent (no misrepresentation, duress, undue influence or unconscionable conduct).

Types: oral, written, and standard form contracts (prepared by one party and offered on a take-it-or-leave-it basis, such as phone plans and online terms).

Terms: express (stated) and implied (by law or custom); conditions (essential, breach allows termination) and warranties (less important, breach allows damages).

Unconscionable conduct: taking unfair advantage of a party's special disadvantage. At common law, Commercial Bank of Australia v Amadio (1983); now also prohibited by the ACL.

Unfair contract terms: a term in a standard form consumer or small business contract that causes a significant imbalance, is not reasonably necessary to protect the business, and would cause detriment. Unfair terms in consumer contracts have been void since 2010 (and in small business contracts since 2016), and since 9 November 2023 using or relying on them attracts civil penalties.

Consumer guarantees

Businesses must supply goods that are of acceptable quality, fit for any disclosed purpose, match their description and sample, have spare parts and repairs available for a reasonable time, and comply with any express warranty. Services must be provided with due care and skill. Guarantees cannot be excluded by contract.

Remedies depend on whether the failure is major (the consumer can choose a refund or replacement, or keep the goods and get compensation) or minor (the business chooses whether to repair, replace or refund).

Misleading and unfair practices

• Misleading or deceptive conduct (s 18): a broad prohibition; no intention needed.
• False or misleading representations (s 29): about price, quality, testimonials, warranties.
• Unconscionable conduct (ss 20–21).
• Bait advertising, pyramid schemes, harassment and coercion.
• Unsolicited consumer agreements: door-to-door and telephone sales have a 10 business day cooling-off period.

Penalties and enforcement

Since November 2022, the maximum penalty for a company for each breach is the greatest of $50 million, three times the benefit gained, or 30% of adjusted turnover during the breach period. Examples:

• ACCC v Volkswagen (2019): $125 million for false representations about diesel emissions.
• Qantas (2024): $100 million penalty for selling tickets on flights it had already cancelled, plus a remediation program.

Credit lets consumers buy now and pay later, but it brings risks of over-commitment and exploitation.

• National Consumer Credit Protection Act 2009 (Cth) and the National Credit Code: lenders must be licensed by ASIC, disclose costs and meet responsible lending obligations (not lend if a loan is unsuitable).
• Hardship: borrowers can ask for a hardship variation.
• The Banking Royal Commission (final report 2019) exposed widespread misconduct, leading to remediation and new laws.
• Small amount credit contracts (payday loans): fee caps, strengthened in 2022.
• Buy now, pay later (BNPL): regulated as credit under the Act from 10 June 2025, with a modified responsible lending regime.

Self-help comes first: returning goods, writing a complaint letter, using a chargeback through your bank.

Non-legal measures: CHOICE (consumer advocacy and product testing), the media (consumer affairs programs), online reviews and business reputation, and industry codes of conduct (such as the Banking Code of Practice).

Licensing and certification protect consumers before harm occurs: licensing of builders, motor dealers and real estate agents; product safety standards and mandatory recalls.

Technology has created new risks:

• Online shopping: the ACL applies to overseas businesses selling to Australian consumers (ACCC v Valve Corporation (2016)), but enforcing penalties against them is difficult.
• Online marketing: fake reviews, influencer marketing, "drip pricing" and subscription traps. The ACCC has run sweeps and court actions.
• Scams: Australians reported about $2 billion in scam losses in 2024, according to the National Anti-Scam Centre. Responses include the National Anti-Scam Centre (2023) and the Scams Prevention Framework Act 2025 (Cth), which requires banks, telcos and digital platforms to prevent, detect and respond to scams.
• Data and privacy: the Privacy Act 1988 (Cth), amended in 2024; the Optus and Medibank data breaches (2022) highlighted risks.

Worked example: applying the consumer guarantees

A consumer buys a $900 laptop for personal use. After four months the screen fails and cannot be repaired. Step 1: the consumer is protected, because the goods are for personal use (and are also under $100,000). Step 2: a laptop failing completely after four months is not of acceptable quality. Step 3: the failure is major because a reasonable consumer would not have bought it knowing of the problem. Step 4: the consumer can choose a refund or replacement. If the retailer refuses, the consumer can complain to NSW Fair Trading and then apply to NCAT.

Use criteria such as:

• Accessibility: cost, time and awareness of rights.
• Enforceability: do individuals and regulators actually enforce the law?
• Deterrence: are penalties large enough to change business behaviour?
• Responsiveness: how quickly does the law adapt to new products and technology?
• Balance: protecting consumers while allowing businesses to operate efficiently.

Typical judgement: the ACL provides strong protection on paper and powerful enforcement against large businesses, but individual consumers often find it hard to enforce their rights, and law reform tends to lag behind technology.

• Using the old $40,000 threshold for who is a consumer.
• Saying unfair contract terms are "illegal" before November 2023. They were void, but penalties started then.
• Treating consumer guarantees and misleading conduct as the same protection.
• Listing regulators without saying how effective they are.
• Ignoring non-legal measures when the question asks about them.

• Structure: introduction with a judgement and three or four themes; body paragraphs each on one theme (for example contracts, the ACL, credit, technology); conclusion restating the judgement.
• Use recent examples with dates: the 2023 unfair contract terms penalties, the 2024 Qantas penalty, the 2025 BNPL and scams laws.
• Answer both parts when the question has "In your answer, refer to" points.
• About 1,000 words in about 45 minutes. Plan for 5 minutes.

• Crime: fraud and scams as economic offences.
• Human Rights: the right to an adequate standard of living and to privacy.
• Workplace: unfair contract terms also protect small businesses and contractors.