IOM - The ACL, ACCC and Implied conditions

Question 1

what are influences on marketing

Answer 1

These influences impact:
The types of products customers want to buy

Where and how the businesses is allowed to present their marketing messages

Question 2

consumer laws

Answer 2

Ensure that the marketing messages and strategies used by businesses accurately represent the goods and services they are selling

i.e. they indicate the marketing strategies and techniques that businesses are NOT allowed to use

Question 3

consumer laws in australia

Answer 3

The key consumer protection legislation in Australia is the Australian consumer law (ACL) which came into effect on 1 January 2011. It is set out within the competition and consumer act (commonwealth) 2010

Question 4

The ACL includes sections on the following:

Answer 4

A national unfair contract term law covering standard form consumer and small businesses contracts

A national law guaranteeing consumer rights when buying goods and services

A national product safety law and enforcement system

A national law for unsolicited consumer agreements covering door to door sales and telephone sales

Simple national rules for lay by agreements and

Penalties, enforcement powers and consumer redress options

Question 5

ACCC and nsw fair trading

Answer 5

The Australian competition and consumer commission (ACCC) promotes competition and fair trade in markets to benefit consumers, businesses and the community

Their primary responsibility is to ensure that individuals and businsses comply with Australian competition, fair trading, and consumer protection laws.

The ACL is administered by the ACCC as well as state and territory consumer protection agencies such as NSW fair trading

Question 6

the ACL and the marketing department

Answer 6

Marketers need to be aware of the laws that regulate their activities. Ignorance of the law is no defence

Their responsibility is to understand and apply the laws within their business where needed. They may need to change a particular marketing strategy/activity to ensure it is upt to date with the current laws

The maximum penalties per breach of the ACL including unconcible conduct, making false or misleading representations, and supplying goods or services that do not comply with safety standards or which are banned is

For corporations $10 000 000, for individuals $500 000

Unconscionable conduct is any practice is any practice by a business that is not reasonable and often illegal

Question 7

ACL and specific marketing practices

Whilst the ACL does contain much more information, it is mot relevant to marketers because it addresses:

Answer 7

o Warranties
o Implied conditions
o Price discrimination
o Deceptive and misleading advertising

Question 8

Implied conditions/consumer guarantees

Answer 8

Whenever a business sells a good or provides a service they are engaging in a contract

This has a serious of conditions that automatically applied whilst the syllabus calls these ‘implied conditions they are set out in the ACL as ‘consumer gurantees’

Question 9

Implied conditions/consumer guarantees

All products sold must be of an acceptable quality, meaning:

Answer 9

That the products is fit for the purpose for which it is being sold,

Acceptable in appearance and finish

Free from defects

Safe and durable

Question 10

Implied conditions/consumer guarantees

Other consumer guarantees/implied conditions are that:

Answer 10

The goods match their description

Repairs and spare parts reasonably available

Any services are carried out with due care and skill

The services are completed with a reasonable time

Any breach of these conditions, voids the contract and the consumer has the right for a replacement or refund

Question 11

warranties

Answer 11

A warranty is a voluntary promise offered by a person or business who sells a product or service to a consumer.

Upon sale, this promise becomes a right under the ACL

However, consumer guarantees apply to make many products and services you sell regardless of any other warranties that you may provide

Question 12

Express warranties

Answer 12

A business may make extra promises verbally or in writing about the quality or standard of a good

Express warranties may refer to:

• The quality, performance or characteristics of the good
• The durability of the good
• The availability of servicing and supply of parts

Question 13

Warranties against defects

Answer 13

A supplier or manufacturer may provide promise to consumers about the process if something goes wrong with a good or service. These are referred to as manufacturers warranties. Under the ACL these are called ‘warranties against defects’

Question 14

Extended warranties

Answer 14

Some suppliers or manufacturers offer optional extended warranties to lengthen the coverage of their manufacturers warranty

Businesses must ensure they do not mislead consumers into thinking that they are required to pay for rights that are automatically provided by the consumers

Question 15

price discrimination

Answer 15

Involves selling the same product to different buyers at different prices without a difference in the costs associated with selling to those customers

The competition and consumer act prohibits price discrimination if the discrimination could substantially reduce competition.

If a business’s discriminates against an identifiable group, it would risk being in breach of the radical or sex discrimination act

Question 16

examples of price discrimination

Answer 16

Uber has used forms of price discrimination, based on the geography of the customer using the service

Jaycar also uses a form of price discrimination based on different prices for customers buying items in bulk

Question 17

deceptive and misleading advertising (conduct)

Answer 17

unlawful for a business to engage in any conduct that misleads or deceives or is likely to mislead or deceive consumers

This law applies even if you did not intend to mislead or deceive anyone or no one has suffered any loss or damage as a result of your conduct

Deceptive and misleading advertising is part of this conduct

The competition and consumer act makes it unlawful to represent goods or services as having characteristics that they don’t possess such as quality, model, value, approval, performance and benefits

Question 18

It also makes it illegal to mislead bout

Answer 18

 Price
 Availability for repair
 Place of origin
 Need for the good.

Question 19

Specific marketing techniques that are closely examined due to their potential to be misleading or deceptive include

Answer 19

	The use of fine print 
	The use of vague words like ‘fresh’ or ‘natural’ 
	Before and after advertisements 
	Tests and surveys 
	Packaging 
	Bait advertising