Consumer Law and the Internet: Are You Compliant?

If you have an online website selling goods or services to Australian consumers, you need to be aware of the consumer laws to ensure your website business is compliant.

The regulators are now ‘patrolling’ websites selling products and services to consumers and issuing penalties to non-compliant websites. This includes sites that copy terms and conditions and privacy policies.

The Australian Consumer Law that came into effect in January 2011 has a number of significant implications that businesses must be aware of. The Australian Consumer Law replaces the old Trade Practices Act and is in place to protect consumers, with particular focus on online e-commerce.

With the growth of online businesses, it is difficult to protect Australian consumers from both overseas and local online scams and false and misleading online advertisements. By regulating what and how local consumers are sold products and services, the legislation provides a good level of protection for those who purchase online from reputable sources.

The majority of e-commerce websites are not compliant. The sites have either no terms and conditions or have copied another website’s terms which are non-compliant or do not relate to their business. These websites are being sought out and reviewed by the Consumer Commission and being issued with penalties or being shut down until such time as they comply with proper terms and policies.

The laws are further regulating sites to protect consumers by requiring specific consumer guarantees and warranties. These guarantees and warranties must be included in the terms of purchase and must comply with a minimum standard. The consumer laws also regulate testimonials, advertising, timing for service, spare parts, refunds and other requirements for provision and sale of goods and services to your consumers. You need to be aware of these laws that restrict your commercial business policies such as stating that you do not, under any circumstances, provide refunds. This is not permitted under the law with most products and services.

Generally, you need to be aware of the new laws so that you know what your obligations are, as an e-commerce business, to your customers before you begin selling any goods or services on your website.

More importantly, businesses must ensure that they have the appropriate terms included on their websites to be compliant with the new law. This will also accurately guide your customers as to what to do if there is a problem with any products that they purchase from you and what your warranties are with respect to the goods or services you are selling.

This consumer law is being followed and is similar to requirements in other English speaking countries. Eventually government regulators around the world will follow this method of regulating both overseas and local online businesses as it is one of the only means by which they can make online business owners responsible and accountable.

The underlying message behind the significance of the new consumer law requirements and regulation is that this means that online website businesses must have good, up-to-date terms and conditions and privacy statements on their websites.

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