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Know Consumers’ Rights- Repairs, Replace, Refund

As a camping facility provider, did you know you must, by law, guarantee the services you provide?

And that your customers have the right to cancel the contract or ask you to fix the service if it is not provided properly?

These rights are called consumer guarantees and they have been law since 1 January 2011.

A national ACCC campaign – Repair, Replace, Refund – highlights consumer rights and business obligations under the consumer guarantees. The consumer campaign features internet, radio and outdoor advertising, along with mainstream media publicity.

Given the profile of the campaign, it is important that you understand your obligations and subsequently aid consumers with their understanding.

But it’s more than just an obligation. Australian businesses experience significant costs every year to deal with problems where they are legally obliged to provide a remedy for consumers.

The spin-off effects can include declining sales, a drop in return business and damage to your company’s reputation.

So it’s in your interests to understand and comply with the provisions, and to have in place a reliable system to manage complaints about any unsatisfactory services.

What are the consumer guarantees?

In broad terms, the consumer guarantees state that all goods sold in Australia must be of acceptable quality, be fit for the purpose they are intended and match the description given.

Services must be delivered with due care and skill, and completed within a reasonable time if no set time-frame is agreed. They must also fit any disclosed purpose and achieve any result that the customer made known to you prior to agreeing to the services.

Businesses are required to provide appropriate remedies for anything they sell for domestic, household or personal use that does not meet the consumer guarantees. This includes repairing or replacing the product, providing a refund, fixing the problem with the service or providing compensation for any difference in the value of the service provided and what was paid.

The consumer guarantees cannot be changed, limited or refused by businesses.

How do I know what sort of remedy to provide?

If goods or services don’t meet the consumer guarantees, the customer has a legal right to have their problem fixed. The most appropriate way to resolve it will depend on how serious the problem is.

In terms of camping facility services, if a customer reports a minor problem with a service that can be fixed, he/she must give the service provider an opportunity to fix the problem free of charge and within a reasonable time.

However if the service provider refuses to fix the problem or takes too long, the customer can:

  • get someone else to fix the problem (deliver the service) and ask the original supplier to pay reasonable costs; or
  • cancel the contract and get some or all of their money back, if they have already paid.

If the customer reports a major problem he/she is entitled to cancel the contract and get a refund, or keep the contract and receive compensation for the difference in the value of the service provided and what was paid.

A major problem with a service is when it:

  • has a problem that would have stopped someone from purchasing the service if they had known about it
  • is substantially unfit for its common purpose and can’t easily be fixed within a reasonable time
  • does not meet the specified purpose the customer asked for and cannot be easily rectified within a reasonable time
  • creates an unsafe situation.

When is a customer not entitled to a remedy?

Consumer rights are not unlimited. You are not required to provide a remedy unless one of the guarantees has not been complied with.

For example, you are not required to provide a remedy if a customer simply changes their mind.

What about business to business transactions?

An important point to note is that the consumer guarantees do not just impose obligations on businesses – they also provide them with protections. When you buy goods or services under $40,000 for your business, if one or more of the consumer guarantees has not been met, your business is entitled to the same legal recourse as a consumer.

That is, you may contact the ACCC, your local office of fair trading or have the matter heard at your local small claims tribunal or Magistrate’s Court. Where parties cannot reach an agreement, the tribunal or court will decide the nature of the business’s failure to meet one of the guarantees and how the supplier must remedy that failure.

The ACCC has produced an online education module for businesses to help them understand consumer guarantees and train their staff. Visit www.accc.gov.au/consumerguarantees to view the module.

For further information visit www.accc.gov.au/acl or contact the ACCC Infocentre on 1300 302 502.