Big increases for breaches of consumer law on the cards

It was only four years ago, in September 2018, that maximum penalties under the Australian Consumer Law were last increased from $1.1 million to $10 million.

But the new federal government wants the price of misconduct to be high enough to deter non-compliance, so it’s released a draft bill proposing a five-fold increase in the maximum penalties for breaching the Australian Consumer Law.

Overview of the proposed changes

Under the draft bill, the proposed maximum penalties for each breach will be the greater of these three things:

• $50 million (up from the current $10 million)
• 30% of adjusted Australian turnover during the breach turnover period for the offence (up from the current 10% of annual turnover in the preceding 12 months)
• Three times the value of the benefit gained from the breach (unchanged)

For individuals, the proposed maximum penalty would be raised to $2.5 million.

What does this mean for business? 

While the federal government still needs to get the draft bill through parliament, penalties for consumer law breaches are already on the rise, with the Australian Institute of Professional Education being hit with a record $153 million fine in December 2021.

Given the consequences, businesses should make sure rigorous consumer law compliance policies are in place and staff are adequately trained.

Blaine Hattie is a business lawyer and principal at Sutton Laurence King Lawyers.

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