The Australian Consumer Law (ACL) (which is Sch 2 to the Competition and Consumer Act 2010 (Cth)) contains prohibitions on the following unfair practices:

• offering rebates, gifts, prizes or free items without intention to provide (s 32, ACL);

• bait advertising (s 35, ACL);

• wrongly accepting payment (s 36, ACL);

• unsolicited supplies (ss 39–43, ACL);

• pyramid schemes (ss 44–46, ACL);

• multiple pricing (s 47, ACL);

• referral selling (s 49, ACL); and

• harassment and coercion in connection with the supply or payment for supply of goods and services: s 50, ACL.

The ACL also requires suppliers of goods and services to consumers:

• the value of which exceeds $75 (exclusive of GST), to provide the consumer with a “proof of transaction” which identifies the supplier, contains the supplier’s ABN or ACN and states the date of supply, the goods or services supplied and their price (s 100, ACL); and

• provide an itemised bill for the supply of services, where requested by a consumer, within seven days of the request: s 101, ACL.

Section 32 of the ACL prohibits the offering of a rebate, gift, prize or other free item with the intention of not providing it, or not providing it as offered, in connection with the supply of goods or services or interest in land. Where they are offered, they must be provided within the time specified or, if not specified, within a reasonable time.

See Offering rebates, gifts, prizes or free items.

Bait advertising is prohibited under s 35 of the ACL. It occurs when a supplier advertises goods or services at a particular price in circumstances where the supplier is aware that there are reasonable grounds for believing that the supplier will be unable to supply those goods or services at that price for a reasonable period and in reasonable quantities, having regard to the nature of the market and the nature of the advertisement.

The prohibition on bait advertising is directed at preventing suppliers from using lower prices as a bait to lure consumers to them, without the ability to honour those prices or supply the goods and services at those prices. Breach of the prohibition is an offence for which a pecuniary penalty may be ordered. It can also result in civil claims for loss and damage.

See Bait advertising.

Accepting payment for goods or services:

• without an intention to supply those goods or services;

• with the intention of supplying materially different goods or services; or

• where the supplier is aware or ought to be aware that it will not be able to supply the goods or services within the time specified or, if no time is specified, within a reasonable time,

is prohibited under s 36 of the ACL and is an offence for which pecuniary penalties apply. It can also result in civil claims for loss and damage.

Limited exceptions apply to the prohibition, including where the inability to supply is due to circumstances beyond the supplier’s control (and the supplier took reasonable precautions to avoid it) and where replacement goods or services are offered and the customer agrees to accept them.

Note that the prohibition on wrongly accepting payment is not limited to supply of consumer goods or services — it also applies to supply of commercial goods and services to businesses. The prohibition also applies to acceptance of part payment.

See Wrongly accepting payment.

Section 40 of the ACL prohibits a person from asserting a right to payment for unsolicited goods or services unless the person has reasonable cause to believe that there is a right to the payment. “Unsolicited goods” and “unsolicited services” are each defined in s 2(1) of the ACL to mean “goods sent to a person without any request made by him or her or on his or her behalf” and “services supplied to a person without any request made by him or her or on his or her behalf”, respectively.

Specific prohibitions exist:

• on the unsolicited supply of credit or debit cards (s 39, ACL); and

• on asserting a right to payment for unauthorised entries or advertisements in a publication: s 43, ACL.

Recipients of unsolicited goods have no liability to pay for those goods and no liability for any loss and damage to them unless the recipient does a wilful and unlawful act in relation to the goods during the “recovery period” (which is a period of three months from the date of receipt of the goods, or where the recipient has served a notice on the supplier, one month from the date of the notice) (s 41, ACL). For unsolicited services, the recipient has no liability to pay for the services or any loss and damage which results from the supply of the services.

See Unsolicited supplies.

Section 44 of the ACL prohibits participation in, and inducement to participate in a pyramid scheme.

Participation includes establishment and promotion of the scheme. A pyramid scheme is one in which participants provide financial or non-financial benefits to other participants, which are induced by the prospect that, if the participant introduces further new participants, he or she will be entitled to a financial or non-financial benefit.

See Pyramid schemes.

Section 44 of the ACL provides that, where multiple prices are displayed for goods, it is an offence to sell the goods other than for the lowest price displayed. Prices can be “displayed” in a number of ways, including by something affixed to the goods, something encoded in the goods, in point of sale material, in catalogues or in any other manner in which prices can reasonably be inferred.

A note of caution — if a price is only partly obscured, it will be held to be “displayed”.

Practice Tip: It is prudent for the business (particularly retail staff) to be aware of this provision of the ACL to ensure the appropriate price is charged to the consumer at point of sale.

The practice of inducing a consumer to acquire goods or services by offering the consumer a rebate, commission or other benefit, to be received after entering the contract, for providing the names of prospective customers or otherwise assisting in the supply of goods or services to other consumers is prohibited by s 49 of the ACL. The prohibition applies where receipt of the rebate, commission or other benefit is contingent on an event occurring after the contract is made.

Section 50 of the ACL prohibits the use of physical force, undue harassment or coercion in connection with:

• the supply or possible supply of goods or services;

• payment for goods or services;

• the sale or grant, or possible supply or grant of interest in land; or

• payment for an interest in land.

Suppliers who supply goods or services to consumers where the total price (excluding GST) is $75 or more, are required to provide the consumer with a proof of transaction. If the price is less than $75 but the consumer requests it, the supplier must also provide a proof of transaction within 7 days of the request: s 100, ACL. The proof of transaction must identify the supplier and its ABN or ACN, the date of supply, the goods or services supplied and the price. In-house counsel should be conscious of the fact that the business must have processes in place to ensure a proof of transaction is provided in accordance with s 100 of the ACL.

Suppliers of services to consumers must, if requested by the consumer, provide an itemised bill, specifying how the charges were calculated, the hours spent and the hourly rates and a list of materials used and amounts charged for those materials: s 101, ACL.