Analysis of Consumer Rights and Business Ethics in Australia

This report provides a comprehensive legal analysis of a case involving a consumer, Erin, who purchased faulty products from an online retailer, Ausslae. The report examines the violations of Erin's consumer rights under the Australian Consumer Law (ACL), focusing on the retailer's refusal to provide refunds or replacements for the defective items. The analysis includes relevant sections of the Competition and Consumer Act 2010 and explores legal precedents from cases such as ACCC v Reckitt Benckiser and ACCC v Whistle to establish the legal arguments for Erin. The report evaluates the retailer's obligations regarding warranties, consumer guarantees, and the right to refunds or replacements. It also discusses the role of the ACCC in protecting consumer rights and suggests measures to strengthen consumer protection, concluding with recommendations on how Erin can seek justice and what steps the ACCC can take to prevent future violations. The report aims to provide a clear understanding of consumer rights, ethical business practices, and the legal avenues available to consumers in similar situations.

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Introduction
Erin innocently purchased three items from Ausslae through their website in Australia.
The products supplied to Erin did not meet her expectations and some were faulty. The hair
straightener Erin bought for her daughter Tracey was meant to produce curls and not only
straighten the hair. The second item Erin bought was an air fryer which was faulty and lastly a T-
shirt that was of a different material from the one ordered. Despite Ausslae advertising in their
website that there products were of good quality. Ausslae refused to neither refund nor exchange
the items purchased by Erin. This assignment will focus on the legal options Erin should follow
to get justice. It’s the responsibility of the law to protect its citizens through the Consumer
Protection Act of 2010 from suppliers who do not deliver on their products. The Consumer Act
of 2010 will provide the basis for Erin’s legal argument against Ausslae. This paper will analyze
how Erin’s consumer rights were violated and the legal precedence to be followed for her to get
justice. The assignment will conclude by giving recommendations on how consumer rights can
improved.
The Consumer Act of 2010
The Competition and Consumer Act of 2010 was developed from the 1974 Trade
Practice Act. These Acts were formed to ensure both the buyers and sellers are protected from
any form of exploitation (Broni, 2010). Erin rights as a consumer were violated at three instances
in this case. Amongst the provisions of the Consumer Act is to ensure fair trading practices are
followed and consumers gain value for their money.

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Facts of Erin v Ausslae Cases
The Australian Competition and Consumer Commission cautions’ retailers like Ausslae
from providing misleading information to the consumers. The information that was posted on
Ausslae’s website was misleading to Erin and the general public (Cavaliere, 2010). The facts in
Erin’s case are very clear. The three items purchased were faulty. The cases will be advised and
argued using one point of view. This is because they have similar facts and characteristics. The
nature of response from the retailer was also similar to all the three products purchased. The only
difference in the facts of this case is the pricing of the different commodities purchased.
Electronics warranty laws in the EU provide for a period of 2 years. Erin having
purchased her hair straightener and air fryer from Ausslae was automatically guaranteed
replacements. This law also applies to online retailers. This means that Ausslae is obliged to
either refund or replace Erin’s goods.
The law also provides provisions to refuse accepting back bought goods (Heath, 2011).
This only applies in cases where the consumer changes his or her mind or finds a cheaper
product (Thompson, 2015). This case did not apply in the case of Erin. Erin did not change her
mind or find a cheaper place to buy the same products.
Under the ACCC clothes bought from either retail stores or online stores can be returned
and replaced. The law gives a period of 14 days for the buyer to return the products (Halbert,
2011). The same laws that apply to electronic warrantee and guarantee laws also apply for
clothing’s. The retailer is at liberty to refuse to exchange the goods bought if there are no valid
reasons. The facts of the case clearly indicate the consumer rights for Erin were violated.

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ACCC v Reckitt Benckiser
The 2015 case between The Australian Competition and Consumer
Commission challenged Reckitt Benckiser presented the challenges consumers like Erin face.
The pharmaceutical company misled its consumers into buying Nurofen products which did not
provide intended medical solution. Nurofen had advertised to heal specific pains in the body
which it did not cure. According to Reckitt Benckiser website Nurofen was supposed to heal
migraine and back pains. The ACCC investigations found that the pharmaceutical company had
contravened sections 30, 32 and 35 of ACCC.
The court ruled that Reckitt Benckiser had lied to the consumers regarding the
components in Nurofen. The components in Nurofen were found to be offering general treatment
and not specific treatment alleged by Reckitt Benckiser. Judge Edelman restrained Reckitt
Benckiser from misleading consumers in his ruling and demanded the correct information be
used in its advertisement (Peterson, 2014). The court order the court to pay ACCC legal fees and
damages caused to consumers who had purchased Nurofen.
The ruling of ACCC v Reckitt Benckiser will be followed to determine the case between
Erin and Ausslae. The grounds for legal argument are similar. The same strategies were used by
Ausslae to get Erin to buy the faulty hair straightener were also used by Reckitt Benckiser in
misleading consumer to buy Nurofen.
ACCC v Whistle
Whistle in 2015 was accused by ACCC for using online advertisement to mislead
consumers. Whistle Company in their advertisement campaigns for mattress cleaning machines

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and detergents falsely advertised on their website wrong products. Their marketing strategy used
fabricated information that their machines provided dry cleaning services which was false
(Cressy, 2012). To further their cause, Whistle used wrong customers’ testimonies into getting
many customers to buy the dry cleaning machines.
The court ruled that the actions by Whistle were intentional and were selfish. They were
fined $200,000. The judge also ruled that they publish an apology in the New Zealand Magazine.
To prevent other retailers from misleading its consumers the court also penalized whistle $
10,000 which was paid to ACCC (Green, 2011). They were put on three year probation by
ACCC under close monitoring and supervision.
The case of ACCC v Whistle provides precedence for the case between Erin and Ausslae.
This case should apply in the transaction Erin made to purchase for her parents the air fryer
which was faulty. Ausslae should be compelled to pay both ACCC and Erin for the damages
caused and to ACCC for breaching its Consumer Protection Laws.
Australian Consumer Laws on Warranty and Consumer Guarantee
The ACCC examines cases on warranty based on individual cases. The three cases
presented by Erin require to be examined according to the retailer’s terms and conditions against
the set requirements by ACCC (Crane, 2016). This particular case does not provide the terms and
conditions provided by Ausslae. According to ACCC it’s the responsibility of the retailer to
inform the buyers about their terms and conditions. The only condition that was available to Erin
was that goods once sold cannot be returned or money returned in cases of defects or
malfunctions.

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The Consumer Law states that all products bought by retailers have an automatic
guarantee. This case also applies to the items Erin purchased from Ausslae. The fact that all the
three products did not function as required ACCC intervention. The law demands that goods
valued below $ 40,000 0 or above should be functioning as intended either for domestic or
commercial use. The goods bought by Erin were below $ 40,000 and for domestic use.
Consumer Rights
The law provides options that protect consumers in case automatic guarantee is not honored by
the seller (Trevino, 2016). All the three items bought by Erin are protected in the following
rights.
Right to Replacement or Refund
The consumer is at liberty to demand for repairs to be done to their products. The
business is mandated to do the repairs if they are minor and the consumer gets satisfied by the
product. Unfortunately in cases like the one for Erin where the retailer refused to accept
responsibility, the buyer is permitted by law to do the following. Erin can tale the electronic
goods purchased at Ausslae to elsewhere where they can be repaired and pass the costs to
Ausslae. The law also gives a provision for Erin to ask for a refund or replace from Ausslae of
the same value. The law demands that the products being repaired or replaced should maintain
their initial purchase value.
Right to Return a Product
Erin is obliged to return the T-shirt bought to Ausslae. The product was of the wrong
description ordered and it cannot be repaired. The law states that the buyer is responsible to
return the and in case of transport fees incurred are billed to the seller (Ferrero, 2016). The law

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does not recognize the provision provided by Ausslae that goods once purchased cannot be
refunded or returned.
Cases where the seller fails to accept responsibility the buyer is advised under
Competition and Consumer Act 2010 to report the seller. Erin will be obliged to report Ausslae
to the CCA for legal actions to be taken. Depending on the findings of the CCA and the ruling of
the court, legal compensation will be made to the buyer.
ACCC v Bunavit
The Federal Court of Australia in 2016 ruled that Bunavit failed to provide necessary
information to its sellers regarding their guarantee policy. Bunavit was found guilty for not
providing guarantee for the appliances that they sold (Davies, 2016). The court found that
Bunavit had disregarded Section 29 and 30 of the ACL Act. They were fined $50,000 in
penalties. The burden of proof was found to be with the workers of Bunavit who like Ausslae
refused to acknowledge responsibility for faulty goods.
ACCC v LG Electronics
The ACCC accused LG Electronics for misleading the public in contravention of
Sections 18 and 29. The allegations were based on warranties that gave a provision for the repair
of TV sets for free when they stop functioning (Shum, 2011). LG Electronics later claimed that
provision of the repair service was a privilege given to its customers and not a right.
The court using the ruling of Donoghue v Stevenson asserted that corporations like LG
Electronics are at liberty to offer extra services to customers (Trevino, 2016). The argument
according to Judge Atkin was that organizations are supposed to have corporate morality in their
dealings. This also applies to the case of Erin v Ausslae. The retailer should have upheld its

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morals in relation to dealing with its customers. Selling faulty items and refusing to take
responsibility and shows lack of integrity on the part of the retailer.
The allegations of Erin have proved that Ausslae violated both the customers’ consumer
rights and the law according to ACCC and ACL. The facts have also asserted that there was
indeed a transaction between Erin and Ausslae. The law is very clear regarding warranties and
guarantee for goods and services bought (Vitell, 2015). Using precedence of previous rulings
Erin will be compensated and Ausslae obliged to pay ACCC penalties and damages caused
(Nica, 2015). The ultimate decision will be at the discretion of the court in this ruling.
ACCC Measures to Strengthen Consumer Rights
The issues faced by Erin have been experienced with other consumers. These affect the
economy and businesses in the negative way. To prevent cases like these, the ACCC has put in
place the following measures to ensure consumers’ rights are not violated at will by
unscrupulous retailers.
The ACCC has put in place measures that prevent retailers like Ausslae from giving false
adverts on their platforms which include websites. The advert on Ausslae’s website was
misleading. Buyers bought goods believing that they were supporting the Australian market and
brands while building local businesses like Ausslae.
The ACCC needs to strengthen its monitoring and supervision roles to include online
stores like Ausslae. Regulating online marketing channels provides a challenge due to the vast
nature of the internet and issues of cyber security and fraudsters online. It is recommended only
registered retailers are supposed to be selling goods to consumers. The challenge with this
approach is that the economy operates based on market dynamics of willing buyer willing seller

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premise. The law provides guidelines and enforcement but the market is controlled by economic
forces. The reason Erin chooses to purchase items from Ausslae and not any other store.
Conclusion
Erin’s case presents the challenges many consumers face in the market place. The ACCC
has been mandated by the law to protect and shield innocent buyers from retailers who may take
advantage of them. Precedence has been set using different cases and rulings that have set a
foundation for determining Erin’s case. Consumer rights are very important in any stable and
thriving economy to prosper and satisfy its customers.

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