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New consumer laws likely to sting

New consumer laws likely to sting

A steady stream of legal work may emerge from the unfair contract regime under the new Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010 and the Australian Securities and…

A steady stream of legal work may emerge from the unfair contract regime under the new Trade Practices Amendment (Australian Consumer Law) Act (No.1) 2010 and the Australian Securities and Investments Commission Act 2001, with experts declaring that businesses may find themselves ill prepared.

Middletons partner Murray Deakin believes the new unfair contract provisions aimed at protecting consumers - and increased powers of the Australian Competition and Consumer Commission (ACCC) - will require businesses to be prepared if they are to avoid falling foul of the new laws.

"It is going to have a significant impact on businesses generally, because the width of these amendments is so extensive," he said.

"Businesses ... need to be reviewing their contracts now. We are only ... days away from an operational law, and [compliance] will be a big exercise for some businesses ... It is a very big project which should be well under way by now, or needs to be initiated fairly quickly."

According to Deakin, the ACCC has its short-term sights set on the telecommunications, car hire and gymnasium industries, though targeted businesses are likely to have a window of opportunity to address any issues arising under the legislation.

"The good news is that the ACCC is expected to have an initial compliance focus, as distinct from an enforcement and prosecution focus, so one would hope that [the ACCC] will be out there in the market place educating businesses that don't already know what the due requirements are under this new legislation," he said.

The new laws, which will commence on 1 July 2010, are likely to prompt a significant increase in work for firms, particularly those whose clients operate in the targeted industries, and Deakin is already seeing clients making moves to understand and meet demands under the extensive changes.

And according to Middletons' Sylvia Ng, businesses also need to be prepared to confront a newly empowered ACCC.

"[The ACCC's powers] do appear to be quite intrusive, and it remains to be seen whether the ACCC is going to take a more aggressive and pre-emptive approach against businesses that are suspected of contravening consumer protection provisions," she said.

"The take home message is to be prepared, because with these new powers and the remedies that are available, the ACCC will get the upper hand and it is likely that they will be more aggressive in their campaign against businesses."

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