Fines & penalties

Suppliers who fail to comply with product bans, standards or mandatory reporting requirements may face enforcement action that attracts fines and pecuniary penalties under the Australian Consumer Law.

Definitions

Fines are monetary fines (criminal penalty) imposed by courts in criminal proceedings. Criminal standard of proof is required.

Pecuniary penalties are monetary fines imposed and collected by civil courts. The civil standard of proof is applied (namely the balance of probabilities).

A number of factors are taken into account by the Court in determining the appropriate fine or level of penalty.  The calculation of the monetary amount of a penalty is dependent on ‘penalty units’ that are set out in the Crimes Act 1914. The value of a penalty unit is currently $180.

Breaches attracting fines and penalties

Bans

A person who supplies a product which is the subject of a  ban may be found guilty of a criminal offence. The maximum fine is:

  • $220 000 for individuals
  • $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 individuals
  • $1.1 million for a body corporate.

Civil penalties for the same amounts also apply.

Where a safety standard specifies two or more sets of requirements for complying with the standard, the supplier must, if requested by a regulator, provide a notice specifying which of those sets of requirements it intends to comply with.   The maximum fine for failing to do so is:

  • $4400 for individuals
  • $22 000 for a body corporate.

This is an offence of strict liability, which means a court does not have to find that a person intended to supply goods which did not comply with a mandatory safety standard in order to find 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 have supplied 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 individuals
  • $16 650 for a body corporate.

This is an offence of strict liability, which means that a court does not have to find that a person intended not to notify the minister in order to find them guilty.

Resolving breaches of product safety regulations

When a product safety regulator finds that a supplier is supplying consumer goods or product related services that breach a mandatory standard or are banned, the regulator's priority is to ensure that the hazardous goods or product related services are removed from the marketplace. The ACCC or a state or territory regulator will inform the suppliers involved.

After receiving the information, the ACCC or state or territory regulator is likely to require that suppliers take action to recall the goods, including:

  • immediately stopping the supply of the consumer goods or product related services
  • remove the goods from retail outlets
  • retrieve the consumer goods from throughout the supply chain and from consumers.

An assessment will then be made of what compliance and enforcement action  may be appropriate in the circumstances. How Australian regulators respond and what sort of action they take depends on a range of factors including:

  • the seriousness of the safety hazard – how much damage it has caused or is likely to cause
  • the volume of goods supplied
  • the blatancy of the breach
  • the supplier’s past conduct
  • the extent to which the supplier cooperates.

More information

Mandatory standards
Product bans
Mandatory reporting