The Consumer Protection Act

By Kellie Tranter

The Trade Practices Act (“the Act”) is concerned with how businesses operate and compete. It protects consumers from businesses that engage in unfair trading practices or sell defective goods.

If you are a rural producer, supplier, manufacturer or processor of primary products, then the Act applies to your business, irrespective of your business structure. As a result, your business is required to meet the standards set by the Act.

Firstly, the Act is designed to enable a business to compete on its merits, making its own decisions, and treating consumers fairly by preventing anti-competitive conduct, thereby encouraging competition and efficiency in business, and resulting in greater choice for consumers in price, quality and service.

Secondly, it prohibits unfair trading practices to safeguard consumers from exploitation through misleading conduct and other sharp selling practices, and preventing unethical businesses from gaining an unfair advantage over their rivals.

Key business practices

There are a number of key business practices and conduct governed by the Act.  They include:

• restrictive trade practices;
• unconscionable conduct; and
• consumer protection

To expand upon the area of consumer protection, the Act imposes obligations on businesses to avoid misleading representations and product descriptions.

When liaising with your customers/clients in relation to your products or services, it may be useful to refer to the following pointers:

Checklist

• Supply correct and current information.
• Divulge all the relevant facts.
• Ensure that you provide a correct overall impression.
• Avoid ambiguous statements.
• Support your claims with facts.
• Emphasise limitations or exemptions.
• “Iron out” any misunderstandings.
• Do not assume the facts or make predictions without a reasonable basis.
• Do not exclude pertinent information.
• Speak in clear terms and avoid using jargon.
• Never make promises that you cannot keep in order to effect the sale or offer goods or services without a reasonable basis for believing you can deliver them.

Remember that your actions as a farmer in supplying commodities and value add products to customers, whether they are large wholesale businesses or individual members of the public, are judged by legal standards set down in the Act.