Retailers face tougher consumer law fines

Business

COMPANIES could soon face a sharp jump in fines to $10 million (K23 million) if they breach consumer laws.
A review of Australian Consumer Law has concluded the current $1.1 million penalty for a contravention is not an efficient deterrent.
A fine that size can be seen by some companies as a ‘cost of doing business’, with the benefits gained from a breach potentially outweighing the fine, according to the report from Consumer Affairs Australia and New Zealand.
“For example, the $10 million (K23 million) penalty imposed against Coles for unconscionable conduct in dealings with 200 of its suppliers was referred to by Justice Gordon as insufficient for a company with annual revenue in excess of $22 billion (K51 billion),” the government agency said.
“While maximum penalties under the ASIC Act are slightly higher ($1.7 million (K4 million) for companies, they are also too low to act as an adequate deterrent.”
The consumer group wants the maximum penalty to increase from $1.1 million (K2.6 million) per contravention to the greater of $10 million (K23 million) or three times the value of the benefit the company obtained from the act or omission.
Legislative changes would then need to pass parliament. – AAP

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