Tips for Responding to ACCC Compliance Letters (in the style of Bridgerton)
ACCC compliance action
The ACCC is the caretaker of a nuanced and finely-tuned set of rules which aims to make a free market “just right” for consumers. If you’re a business operating in that regulated free market, you may find yourself on the receiving end of one of these scary-sounding letters:
- information gathering notice;
- preliminary investigation or substantiation notice;
- compliance letter;
- infringement notice; or
- notice of Federal Court proceedings.
The practical impact of these letters ranges from “please give us copies of some of your documents” to “we’ll see you in court”.
You may have some thoughts: What are the next steps? Do I respond to this letter myself? How much should I say? Do I promise my first-born child? Should I switch to oat milk? All legitimate questions.
We’re going to answer some of those questions, focusing on compliance letters.
Compliance letters
Each year, the ACCC tells businesses what its enforcement priorities are and then targets those priorities with a range of action, including auditing websites, responding to consumer complaints and reports and sending outreach correspondence.
If the ACCC finds material to support a claim that your business may have breached the Australian Consumer Law (ACL), then you may receive a compliance letter. You may receive a compliance letter in circumstances which include:
- your returns policy contains a “no refunds” term, without exceptions;
- your terms and conditions do not include the mandatory text relating to consumer guarantees, as prescribed by the Australian Consumer Law;
- your terms and conditions purport to exclude consequential loss, without exceptions; or
- your social media content makes false or misleading claims.
A compliance letter is a warning to businesses, as well as an opportunity to make things rights. It can be helpful to embrace the sentiments of: “feedback is a gift” and with customer lifetime value in mind: “what’s good for consumers is also generally good for business”.
Responses to avoid
Circling back to our Bridgerton theme, when deciding what action to take next, we suggest avoiding these unhelpful responses.
Responses to adopt
It’s common to have an emotional response to receiving a compliance letter. Here are three tips to help you formulate an appropriate response, remedy the problem, and improve your business’ long-term relationship with its customers.
- It’s (probably) going to be fine. If you’re a business owner operating with reasonable care and skill, and you’ve acted in good faith, it’s almost always going to be ok. But you need to be able to communicate and substantiate that in a cohesive and internally consistent way.
- Be prepared to explain. The ACCC may need to know why things may have gone a bit wrong. It will want to know that you want to and will do better in future. You need a plan: something that’s comprehensible, able to be implemented, and substantiated.
- Know when to ask for help. You might need some help drafting your response to the ACCC. A suitably qualified and experienced lawyer can help you manage the legal side of things. Depending on the issue and the size of your organisation, you could also look at hiring an internal compliance manager or engaging a contractor to implement a compliance program or educate and train your staff. You may also choose to proactively review certain documents and materials within your business and take action before they’re formally flagged as a problem.
By George Legal can help
In the past year, we’ve advised clients in connection with a broad range of ACL-related matters, including:
- responding to compliance letters;
- updating terms and conditions, including returns policies, to comply with the ACL;
- avoiding allegations of false or misleading claims;
- complying with the Electricity Retail Code; and
- defending third party claims alleging breaches of the ACL.
We understand the rules and know what it takes for a business to effectively respond to and manage a range of ACCC compliance actions and ACL-related matters.
If you’re looking for assistance in any of these areas, please get in touch.
