Legal development

Significant increase in consumer definition under the Australian Consumer Law

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    What you need to know

    • The monetary threshold of the definition of a "consumer" under the Australian Consumer Law is increasing significantly
    • Individuals and businesses will now be a "consumer" if they acquire goods or services priced at or less than AU$100,000
    • The ASIC Act will also be amended, meaning a person acquiring financial services under AU$100,000 will be a "consumer" under the ASIC Act

    What you need to do 

    • Consider the change and whether you provide, or acquire, goods or services that will be subject to the consumer protections under the Australian Consumer Law from 1 July 2021
    • Ensure that you comply with the provisions of the ACL (especially the consumer guarantees regime) for all goods and services valued at AU$100,000 or less

    What is changing?

    The monetary threshold in the definition of a "consumer" in section 3 of the Australian Consumer Law has increased from AU$40,000 to AU$100,000. From 1 July 2021, an individual or a business will be a "consumer" for the purposes of the Australian Consumer Law if they acquire goods or services:
    • priced at or less than AU$100,000;
    • of a kind ordinarily acquired for personal, domestic or household use or consumption (regardless of the price of the goods or services); or
    • consisting of a vehicle or trailer acquired for use principally in the transport of goods on public roads,

    unless the goods are acquired for the purpose of re-supply, or for the purpose of using them up or transforming them in trade or commerce in the course of a process of production or manufacture or in the course of repairing or treating other goods or fixtures on land.

    The definition of "consumer" under the Australian Securities and Investments Commission Act 2001 (ASIC Act) will also be amended, meaning a person will acquire financial services as a "consumer" where the price of the services does not exceed AU$100,000.

    What does it mean?

    The consumer guarantees and protections under the Australian Consumer Law and the ASIC Act will now apply to transactions of AU$100,000 or less, and include statutory guarantees that cannot be excluded. The increased threshold will apply to both business-to-consumer and business-to-business transactions.

    If you would like more information on these changes or would like to have a detailed conversation about what this means for your business, please reach out to your Ashurst contact and we would be pleased to assist you.

    Authors: Alyssa Phillips, Partner; Melissa Fraser, Partner; Amanda Tesvic, Senior Associate; Rowan Kendall, Senior Associate; Judy Zhao, Lawyer; and Tom Allen, Lawyer.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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