While parliament was once again engulfed in turmoil amid uncertainties surrounding the Liberal leadership, it quietly passed a law that will adopt recommendations for Consumer Affairs Australia and New Zealand (CAANZ) to dramatically increase the fines for companies that breach the law.
Those penalties, currently capped at $1.1 million, will now be the greater of:
• $10 million;
• three times the value of the benefit received; or
• 10 per cent of annual turnover from the preceding 12 months, in cases where the benefit of the breach cannot be determined.
Australian Competition and Consumer Commission chair Rod Sims welcomed the increased penalties, which he said “need to hit the bottom line so they are not simply seen as the cost of doing business”.
“Perhaps more important, penalties need to be high enough to be noticed by boards and senior managers so that compliance with the law is a higher priority,” he said.
“Companies will now face more serious financial consequences for breaching consumer law that align with competition law breaches.
Mr Sims added: “Increased penalties will help to deter large companies from breaching consumer laws. This is a profound change that I believe will improve corporate behaviour significantly, and so improve the Australian economy and how it works for consumers.”
It comes just a day after a My Business poll suggested that as many as one in seven business leaders have lied to a customer in order to make a sale.