Consumer Claims in Victoria

Consumer claims arise when a person pays for goods or for a service and does not receive the product or service they paid for. This may be because a product is faulty, because a service was not provided or because a service was not carried out with a reasonable level of skill and care. This page deals with consumer claims in Victoria.

Legislation

In Victoria, consumer claims are dealt with under the Australian Consumer Law and Fair Trading Act 2012. This legislation adopts the federal scheme set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth). 

Previously, consumer claims in Victoria came under the Fair Trading Act 1999 and the Trade Practices Act 1974. These Acts are no longer in force.

Misleading and deceptive conduct

Misleading and deceptive conduct in trade and commerce is prohibited under section 18 of the ACL. This conduct is prohibited between trader and vendor and between businesses.

Misleading and deceptive conduct can consist of a number of different types of behaviour by a vendor, including:

• Promotions and advertisements that include inaccurate information
• Statements that fail to disclose important information
• Information that gives a false impression – such as presenting a product in  way that it appears to be a product of another brand.

Engaging in misleading or deceptive conduct is a criminal offence for a company or business. For this offence to be committed it is not necessary that the trader intended to mislead or deceive, but only that their conduct had that effect.

Unconscionable conduct

Unconscionable conduct is also prohibited under s 20 of the ACL.

Unconscionable conduct occurs when behaviour occurs that is so harsh that it goes against good conscience or what the community considers to be just and ethical. This is often because there is power imbalance between the parties and one party takes advantage of this.

Unconscionable conduct may be found to have occurred where a vendor has failed to disclose key terms of a contract or has not given the other party the opportunity to read the contract.

Unfair contracts

Section 23 of the ACL prohibits unfair and standard form contracts.

An unfair contract exists when a consumer contract contains terms that create an imbalance in the rights of parties and where those terms are not necessary to protect the legitimate business interests of the trader. For a contractual term to be unfair, it must cause a detriment (not necessarily financial) to a party if enforced.

The validity of an unfair contract will depend on the contract as a whole and how transparent the term is. If the contract can operate without the unfair term, the remainder of the contract may still be valid.

Examples of unfair contractual terms are terms that have the effect of:

• allowing one party to cancel the contract without penalty but not the other
• allowing one party to vary prices or costs without letting the other party cancel the contract
• allowing one party to renew the contract but not the other party
• allowing one party to escape liability under relevant legislation, including the ACL

Standard form contracts

Standard form contracts are also prohibited under the ACL.

In determining whether a contract is a standard form contract, the matters taken into account include:

• whether one party had all the bargaining power
• whether there was room for negotiation of contractual terms or a ‘take it or leave it’ approach
• whether there were any discussions regarding the terms before the contract was signed.

Victorian Civil and Administrative Tribunal

The Victorian Civil and Administrative Tribunal (VCAT) has jurisdiction to hear consumer and trade disputes. These matters can also by heard by the courts.

While the ACL only applies if the goods were supplied in trade or commerce, VCAT can also hear other disputes under state legislation such as the Goods Act 1958. The Civil Claims List at VCAT hears cases about goods and services that were supplied to or by someone in Victoria. The goods may have been bought by either purchasers or suppliers, and traders can also bring disputes against other traders.

When a consumer claim is made to VCAT, it will attempt to resolve the matter through Alternative Dispute Resolution, including compulsory conferences and mediation. Where a hearing is required, VCAT is not bound by the rules of evidence or typical court formality. 

A consumer claim must be initiated within six years.

Remedies and penalties under the ACL

A number of remedies are available in consumer claims in Victoria. These include:

• injunctions 
• orders awarding damages
• orders awarding compensation
• refunds and returns
• orders that contracts be voided, varied or completed.
• any other order VCAT considers fair in the circumstances. 

The ACL also has penalty provisions under Schedule 2. These penalty provisions are enforced by Consumer Affairs Victoria (and the Australian Competition and Consumer Commission federally) which has the power to investigate complaints made to it by consumers. Often this enforcement will be linked to matters of public concern, patterns of misbehaviour by traders or industry-wide issues.

If you require legal advice or representation in any legal matter, please contact Go To Court Lawyers.