Consumer guarantee directions
The NSW Government is providing the Commissioner for NSW Fair Trading with a new power to issue a ‘consumer guarantee direction’. The new power will apply to complaints lodged from 28 December 2018. The purpose of the reform is to help resolve a consumer dispute with a business about alleged breaches of the consumer guarantees under the Australian Consumer Law. The new power will be run as a pilot program with internal evaluations after 12 months.
A direction can only be considered for consumer disputes about goods purchased in the 6 months prior for a cost of $25 - $3,000. Fair Trading must help the Business and consumer to resolve the complaint between them first. If that fails, a direction may be issued, requiring a business to give a consumer a refund, or to replace or repair the good.
The reform is aimed at enhancing Fair Trading’s existing complaints handling process. When used, the direction will mean Fair Trading can provide consumers and businesses with a fair, quick and cheap resolution to their dispute, outside of courts or tribunals.
Most complaints made to NSW Fair Trading are currently being resolved through mutual agreement between the consumer and the business. Fair Trading will continue to encourage this as the ideal way to resolve disputes, even after the introduction of this new power. Visit the Resolving issues webpage for advice and tools on resolving complaints directly with a business.
Consumer guarantee directions will serve as a tool to educate businesses and encourage the development of good customer service and dispute handling procedures. A recent study by the Society of Consumer Affairs Professionals Australia (SOCAP) found that effective complaint handling procedures can transform dissatisfied consumers into loyal customers and provide a return of $10 for every $1 invested. Visit the Dealing with customers webpage for tips and tools to help businesses put in place this essential feature of good customer service.
If a direct approach is not successful, consumers may lodge a complaint with Fair Trading who will attempt to resolve the dispute. The new direction power will be used to resolve eligible low value disputes where mutual agreement has not been reached.
Download the Consumer Guarantee Directions fact sheet (PDF, 107.15 KB) to learn more about the new powers.