Consumer Laws

Consumer Laws

– Deceptive and misleading advertising

When, in the promotion of a product or service, a representation is made to the public that is false or misleading.

Examples: Overstating benefits, offering discounts that don’t exist, bait and switch advertising.

  • Bait and switch advertising: promoting a heavily discounted product despite the business having limited or no supply.

– Price discrimination

  • Charging different prices to different customers for the same product
  • NB: Discounts for bulk buying are legal.
  • Differences in price is possible when markets are geographically separated or there is product differentiation within the one market.
  • The Competition and Consumer Act 2010 prohibits price discrimination if the discrimination could substantially reduce competition.

– Implied conditions

The unspoken and unwritten terms of a contract.

  • Under the Competition and Consumer Act goods purchased by consumers must be:
  • Acceptable quality (up to standard for its price & free of defects)
  • Fit for purpose
  • Match description or sample

– Warranties

  • Promise made by business to repair or replace faulty products within certain time period
  • All products have implied warrantyBy law, a business must refund the client’s money or exchange the good if it is recognised to have been faulty when it left the store.

Extract from Business Studies Stage 6 Syllabus. © 2010 Board of Studies NSW.