ACCC warns online business to obey real world rules

The Australian Competition and Consumer Commission has warned online traders that they must comply with the same laws that apply to their real-world counterparts, following release of an online survey revealing that many sites are denying customers their legal rights.

The Australian Competition and Consumer Commission has warned online traders that they must comply with the same laws that apply to their real-world counterparts, following release of an online survey revealing that many sites are denying customers their legal rights.

Deputy chairman, Louise Sylvan, told an International Trade Law Conference yesterday that more than 50 percent of the Australian sites surveyed by the ACCC that sold goods or services "contained online terms and conditions which attempted to disclaim consumers' warranty rights or limit liability".

"Some of these clauses, while far from best practice, were not inconsistent with consumers' rights and remedies under the Trade Practices Act -- for example, they appear to limit liability only to the extent permitted by the Act," she said.

However, Sylvan said other clauses "did raise concerns because they misrepresent consumers' rights".

"They failed to convey the level of protection consumers can expect under Australian consumer protection legislation," she said. "Others clauses went further still, attempting to exclude basic statutory rights which are implied by the Trade Practices Act and cannot be excluded."

According to Sylvan, the Trade Practices Act does apply to the Internet, as online consumers and traders have the "same rights and responsibilities trading on the Internet as they do in a regular store".

Sylvan also warned online businesses about scams such as fake billing - when a company seeks payment for a bogus product -- recently undertaken by Domain Names Australia.

The Federal Court of Australia found the company in breach of the Trade Practices Act by sending out "misleading or deceptive notices" to consumers "inviting" them to make payment on an Internet domain name very similar to a legitimate one they already owned.

"The Internet has been a great boon for Australian consumers and business. It's a good resource for consumers and for business it removed geographic barriers and allowed them to compete for markets way beyond our modest population, enabling Australia to enhance its competitiveness," Sylvan told the conference.

"The downside is that the scamsters have become smart about the technology too and honest businesses, consumers, and regulators need to do more to ensure that shopping and transacting online is just as safe as shopping in person at the mall."

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