Employers are liable for things that their employees say to customers.  The company can be found to have breached the Australian Consumer Law (“ACL”) even if an employee doesn’t intend to do wrong or doesn’t know what they are doing is a breach.

Here are 4 common things that can get the company into trouble under the ACL.

1. Misleading or deceptive conduct. This can be something that the salesperson may say, may fail to say, or it could result from how they say something. The salesperson doesn’t have to intend to mislead the customer, but if the customer comes away with the wrong idea there may be a breach of the Australian Consumer Law. This could happen if the salesperson isn’t sure what the correct answer is, doesn’t know and makes something up or is stretching the truth to make the sale.
2. Goods are not fit for the purpose for which they are bought.  The salesperson may recommend goods which do not fit the purpose that the customer tells them they want them for. This could happen if the salesperson misunderstands the customers’ needs, feels bullied by the customer or under pressures to make a sale or because they don’t understand the features of the goods.
3. Pricing. Pricing can cause a range of problems under the Australian Consumer Law. Staff should be careful that goods are advertised or marked with 1 price. Where there are different prices shown or the advertised price is different to the displayed price, they must sell the goods for the cheapest price shown, or withdraw them from sale.  Staff should also be careful to state the single total price of goods or services to the customer where this amount can be calculated. For example if the goods cost $ 100 and the GST is $10, the customer should be told that the cost will be $110.
4. Rights in respect to faulty goods or goods that are not of an acceptable quality. The Australian Consumer Law provides guarantees that the seller must give the customer if the goods or services are not acceptable. Whether the customer is entitled to choose a refund, repair or replacement will depend on how serious the fault is. Employees must not refuse the customer if goods are faulty, and cannot demand that the complaint is made within a certain time.

5 steps you can take to reduce the chance of your employees breaching the Australian Consumer Law.

I’m not suggesting that businesses start spying on their employees but here are a few tips that companies can follow to reduce the risk that employees will say the wrong thing:

1. Provide regular training to cover the products or services sold and/or provide access to specifications and product data if appropriate.
2. Develop a culture where employees are encouraged to ask for advice if uncertain.
3. Provide regular Australian Consumer Law training for employees who deal with consumers to help them to  understand the risks of their actions.
4. Develop and distribute a clearly articulated policy and procedure to follow for complaints about faulty products and returns, that complies with the Australian Consumer Law.
5. Provide pre-written scripts to telephone sales staff.

Ascentia Sustainability can conduct a risk assessment to help you know more about the risks in your company of breaching the Australian Consumer Law and develop a Compliance Program including training and  procedures that can be implemented to reduce the risks of your company breaching the law.