ACCC’s warning to business: get your Terms and Conditions in order
Posted on February 11, 2025
On 4 February 2025, the ACCC released a media statement following a sweep of over 200 online retailers and businesses.
The message is ensure that your Terms and Conditions do not contain false or misleading information and that they are compliant with the Australian Consumer Law.
The results of the sweep were significant enough to warrant the ACCC issuing warning letters to non-compliant businesses. However, all Australian businesses should consider this as a warning, and an opportunity to review and update those ‘standard’ documents so that they are legally compliant.
Some of the problematic statements the ACCC found in the sweep include:
- “Items that have been opened and used cannot be exchanged or refunded”
- “Made to order products cannot be returned”
- “Sale items cannot be returned, exchanged or refunded”
- “In the unlikely event that your item arrives damaged or faulty, please notify the store within 30 days of delivery to receive a replacement”
Under the Australian Consumer Law (ACL), consumers have the benefit of statutory consumer guarantees, which cannot be contracted out of. Consumers who purchase goods have the right to return the item where the item is faulty, of poor quality or doesn’t match its description.
For services, consumers are entitled to a refund or a re-supply of the services where the service was not provided using reasonable care and skill or where it was not supplied within a reasonable time (except as agreed with the customer). Businesses are free to provide additional warranties or promises (e.g. a price beat guarantee) but these in no way replace or affect the statutory guarantees and rights that a consumer has under the ACL.
Specifically, where businesses make verbal or written statements about faulty products like the ones set out below (which the ACCC found in their sweep), they are in breach of the ACL and could be fined:
- No refunds are permitted under any circumstances
- No refunds are provided for sale or specialised items
- To be eligible for a refund, the consumer has a limited timeframe, from receipt of the good, to return the product
- Returns will be subject to a processing, restocking or repair fee
- No refunds are provided for opened or used items under any circumstances
- Delivery fees are non-refundable
- Customers must pay for delivery for returned items
Compliance with consumer guarantees continues to be a key focus for the ACCC in 2025. In 2024 the ACCC was successful in its claims against Koala Living, Mosaic Brand and Mazda Australia for misleading and deceptive conduct and breaches of the ACL where each of these companies were ordered to pay fines (and in the case of Mazda, $11.5 million!).
Conclusion
Now it is more important than ever to get your contracts reviewed by a lawyer, so that you can be sure that your business’ terms and conditions are compliant with the ACL. Otherwise, you might receive an infringement and compliance notice from the ACCC which would not be much fun at all!
