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Penalties & consequences

The ACL introduces a number of new penalties and consequences, as well as maintaining a number of existing penalties and consequences that applied under the TPA.

Bans

A supplier who fails to comply with a ban may be found guilty of a criminal offence.

The maximum fine is $220 000 for an individual or $1.1 million for a body corporate.

Civil penalties for the same amounts also apply.

This is an offence of strict liability, which means a court does not have to consider the person's intentions before finding them guilty.

Standards

A supplier may be found guilty of a criminal offence if they fail to:

  • comply with a mandatory safety standard. The maximum fine is $220 000 for an individual or $1.1 million for a body corporate (civil penalties for the same amounts also apply)
  • nominate the standard they are compliant with if required to do so by a consumer protection agency. The maximum fine is $4400 for an individual or $22 000 for a body corporate.

This is an offence of strict liability, which means a court does not have to consider the person's intentions before finding them guilty.

Mandatory reporting

Suppliers must notify the Commonwealth minister within 2 days of becoming aware that a person suffered serious injury, illness or death associated with a consumer good or product-related service they supplied - either in Australia or overseas.

A supplier who fails to notify the Commonwealth minister within 2 days of becoming aware of the incident may be found guilty of a criminal offence.

The maximum fine is $3330 for an individual or $16 650 for a body corporate.

A court does not have to consider a person's intentions before finding them guilty.

Fines are just one of the tools regulators may use to prevent and resolve breaches of product safety regulations. This page explains the range of possible tools used to promote a safe marketplace.

On this page

What do regulators do if they find a supplier is selling products that are banned or fail to meet mandatory safety standards?

1. Remove the hazardous products from the marketplace

When an Australian product safety regulator finds that a supplier has breached a mandatory standard or is supplying banned products, the regulator's priority is to ensure that the hazardous products are out of the market and out of people’s homes.

How does this work?

The ACCC or a state or territory regulator informs the suppliers involved. After receiving the information, suppliers must:

  • immediately stop selling the products 
  • remove all stock from retail outlets
  • recall the products from the supply chain, and consumers.

Recalls are important because they help stop dangerous products causing accidents, injuries or even death.

2. Take compliance and enforcement action

The ACCC then assesses what compliance and enforcement action it may take against suppliers who have breached mandatory standards or bans. How Australian regulators respond and what sort of action they take depends on a range of factors including:

  • the seriousness of the safety hazardhow much damage it has caused or is likely to cause
  • how many products were supplied
  • how blatant the breach is
  • the supplier’s past conduct
  • the extent to which the supplier cooperates.

Details of compliance and enforcement options

Infringement notices

Under the ACL, the ACCC can issue an infringement notice for breaches of consumer protection provisions, enabling it to deal more efficiently with matters warranting a quick regulatory response.

Infringement notices provide an opportunity for a person to pay a penalty and resolve a matter with the ACCC. If a person who is issued with an infringement notice does not pay an infringement notice penalty, the ACCC may commence proceedings in respect of the underlying alleged contravention of the ACL.

The ACCC can only issue one infringement notice for each alleged contravention of an infringement notice provision, including certain product safety and product information provisions.

An infringement notice must be issued within 12 months after the alleged contravention occurred.

In relation to product safety the ACCC has the power to issue an infringement notice where it has reasonable grounds to believe a person has breached various product safety provisions, including supplying goods that have been compulsorily recalled, are subject to a ban order or that do not comply with a mandatory safety or information standard.

Public warning powers

Under the ACL, there will be two ways to warn the public about certain matters.  At times in consumer market regulation, a rapid warning to the community is the best way of protecting it. 

Under the TPA, product safety warnings could be issued under s. 65B. For example, in 2008 the Minister for Competition Policy and Consumer Affairs issued a warning about the potential risks to small children from personal fitness treadmill machines.

Under the ACL the proposed public warning power will be widened, allowing the Commonwealth or a state/territory Minister to issue a warning that certain goods or product related services are under investigation (s 129).  In addition under s 223, the ACCC and State/Territory Fair Trading Offices will be able to issue public warning notices when, on reasonable grounds, they suspect a contravention of the unconscionable conduct or consumer protection provisions; where someone is likely to suffer detriment from the conduct; and where it is in the public interest.

Civil pecuniary penalties

The ACL will provide the ACCC with the ability to institute a proceeding in a court for the recovery on behalf of the Commonwealth of a civil pecuniary penalty (CPP) for consumer protection matters.  The Court may order a person, who has contravened certain product safety provisions, to pay a civil pecuniary penalty if it is satisfied that the person contravened or attempted to contravene a product safety related provision of the ACL.

A court may order a civil pecuniary penalty for contraventions of the following product safety provisions of the ACL:

  • Supplying goods that do not comply with safety standards (s. 106)
  • Supplying product related services that do not comply with safety standards (s. 107)
  • Supplying consumer goods covered by a ban (s. 118)
  • Supplying product related services covered by a ban (s. 119)
  • Notification by persons who supply consumer goods outside Australia if there is compulsory recall (s. 125)
  • Compliance with recall notices (s. 127)
  • Notification of voluntary recall of consumer goods (s. 128)
  • Suppliers to report consumer goods associated with death or serious injury (s. 131)
  • Suppliers to report product related services associated with death or serious injury (s. 132)
  • Supplying goods that do not comply with information standards (s. 136)
  • Supplying services that do not comply with information standards (s. 137)
  • Compliance with substantiation notice (s. 221)

The maximum CPP for false or misleading (not s. 52) and unconscionable conduct, pyramid selling and breaches of certain product safety provisions will be $1.1m for corporations and $220,000 for individuals. Lesser CPP apply to other contraventions.

Disqualification orders

On application by the ACCC, a court is able to disqualify a person from managing corporations for a period it considers appropriate as a consequence of contraventions of various consumer protection related provisions. Disqualification orders were initially introduced into the Trade Practices Act 1974 in relation to the competition provisions.  They may be particularly useful when addressing problems that arise with ‘repeat offenders’ regarding breaches of consumer law.

In some circumstances, disqualification orders may be appropriate for directors who fail to take steps to ensure that products they sell or produce comply with mandatory product safety standards and other trade practices breaches.

Substantiation power to check claims

The ACL provides the ACCC with a new investigative power: the substantiation notice. The notices can be used in a variety of circumstances, including in relation to product safety claims—such as requiring suppliers to provide information and/or produce documents to confirm that products comply with standards where a claim of compliance to a particular standard has been made by the supplier.

Use the list below to view details on possible penalties and consequences.


  • This page explains how suppliers and industry associations can use voluntary measures to ensure products comply with product safety laws.
  • This page explains when and how product safety regulators may use administrative resolutions when a supplier breaks a law.
  • This page explains how product safety regulators may use litigation (court cases) to deal with suppliers who break product safety laws.

Legal cases

Use the link below to see the latest product safety legal cases or browse all by category or date.


Legal cases and undertakings in Home

Tips

Read this tip to see how breaking product safety laws can cost you time, money and stress.

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