The NSW Government has introduced changes to help consumers and businesses resolve complaints in an efficient and effective way and as an alternative to the often costly (and lengthy) process of courts or tribunals. From 28 December 2018, if a dispute has been through Fair Trading’s dispute resolution process and a resolution has not been reached between the consumer and business, on application by the consumer, the Commissioner for Fair Trading can consider issuing a consumer guarantee direction that requires the business to repair, replace or refund the good, under certain circumstances.
The consumer guarantee direction process
The process includes 6 steps:
- A consumer makes a complaint to NSW Fair Trading.
- NSW Fair Trading will contact both parties to encourage them to resolve the dispute.
- If no mutual outcome has been reached by the business and consumer, the consumer will be advised of their options, including applying for a direction. The consumer will have 30 days to make an application for a consumer guarantee direction.
- NSW Fair Trading will assess an application to see if it meets the eligibility criteria.
- NSW Fair Trading reviews the application and contacts both parties to invite them to make written submissions about the complaint. Information received by Fair Trading from the consumer and business will be shared with the other party so that they have a chance to respond.
- The application is assessed and NSW Fair Trading decides whether to make a direction. The consumer and business are told the outcome of the application.
At any time, the business and consumer can work together to reach a resolution between themselves without a direction being made. Visit the Resolving issues webpage for advice and tools on resolving complaints directly with a business.
Download the Consumer guarantee directions process (PDF size: 54kb) for a simple guide of the steps involved.
To be eligible for a consumer guarantee direction, a dispute must meet certain criteria:
- the matter was lodged with Fair Trading from 28 December 2018, has progressed through the complaint handling process and no agreement was reached between the business and consumer
- is about a product (not service)
- the product has a purchase price between $25 – $3,000 (excluding GST)
- the product was purchased within the 6 months before the consumer made a complaint to Fair Trading
- both the consumer and business are based in NSW (note that corporations only need to have a presence in Australia and are not required to be based in the state)
- it is a dispute about an Australian Consumer Law (ACL) consumer guarantee relating to:
- the acceptable quality of the product
- the product being fit for its disclosed purpose
- the supply of goods by description, or
- the product matching the description, sample or demonstration model.
Matters not eligible include disputes about:
- false and misleading representations
- unsolicited sales or bait advertising
- excluded products, such as a motor vehicle, a component part of a motor vehicle, second-hand good, solar battery, a product relating to a home building claim, or a product that is subject of a review by the court or Tribunal.
Process for assessing whether to issue a direction
As part of the assessment process, NSW Fair Trading will give the business and consumer an opportunity to provide written information about the dispute and respond to any information given by the other party.
In deciding whether to issue a direction or not, NSW Fair Trading will:
- identify which of the consumer guarantees is relevant to the dispute (download a copy of the Australian Consumer Law - Consumer guarantees for businesses guide for more information)
- assess whether there has been a failure to comply with the identified guarantees, and
- assess whether the failure is a major or minor failure, and identify the appropriate remedy (a refund, replacement or repair).
NSW Fair Trading will then decide whether to make a direction or not. If a direction is made, it will direct whether the business is to repair, replace or refund the purchase price to the consumer and will include a monetary value, even where there is a direction made to repair or replace a product.
NSW Fair Trading will advise both parties in writing of any decision that it makes.
After a direction has been issued
If a direction is made, the business must comply with the direction.
If the business or consumer disagrees with the direction, either of them can apply to the NSW Civil and Administrative Tribunal to have the dispute re-determined. The NSW Fair Trading Commissioner may also publish the direction where it has not been complied with.
Options where a business does not comply with a direction
If a direction is not complied with within 28 days, or another period as specified in the direction, the consumer will be able to register the direction in the Local Court as a judgement debt and apply to have it enforced.
This can be done by:
- Completing a Registration/filing of certificate of judgment or order (Form 45) using the Online Registry on the Department of Justice website. For more information about how to do this, visit the Law Access website for a step by step guide.
- Enforcing the judgment through the Local Court. For more information about how to do this, visit the LawAccess NSW website.
Generally, you should seek legal advice before seeking to enforce a judgment debt.
There are a number of different ways you can enforce a judgment and you should think about which option will be best in your situation.
Types of enforcement may include:
- asking the Sheriff to seize and sell property belonging to the business (called a 'writ for the levy of property')
- having money deducted directly from the business’ bank account (called a 'garnishee order')
- issuing an examination notice requiring the business to provide information about the business’s finances (called an 'examination' ) before seeking a garnishee order, if further information is required.
For a step by step guide on how to proceed with enforcement, visit the LawAccess NSW website.
You have six years to start court proceedings to recover money or goods. If you are not sure when your time limit begins, seek legal advice.
When will the change start
Consumer guarantee directions started on 28 December 2018 and applies to new eligible complaints lodged with NSW Fair Trading from that date. Complaints already lodged with NSW Fair Trading before 28 December 2018 are not eligible for a direction.
Download the Consumer guarantee directions process (PDF, 53.88 KB) for a simple guide of the steps involved.
Download this information in a Consumer Guarantee Directions fact sheet (PDF, 149.04 KB).