With the start of the new financial year comes a significant change to the definition of “consumer” in the Australian Consumer Law and the ASIC Act, which will increase consumers’ ability to rely on consumer guarantee protections.
Under amendments that were passed in July last year and take effect today, the monetary threshold for the definition of a consumer has been changed from A$40,000 to $100,000.
Previously, consumer guarantee protections applied where a person (including a small business) acquired goods or services for $40,000 or less, which were acquired for personal or household use.
Now the protection will apply to purchases for $100,000 or less.
The ASIC Act has a consumer definition that mirrors the ACL and which applies to the provision of financial services.
The aim of the change was to restore the real value of the threshold, which was unchanged since 1986.
Under the consumer guarantee, a supplier guarantees that goods are of acceptable quality, goods will match the description provided by the seller, express warranties will be honoured, and goods are fit for any disclosed purpose.
A supplier also guarantees the performance of services with due care and skill.
In the case of a breach, a business is required to provide a consumer with a remedy, being either a repair, replacement, refund and compensation for any loss.