Hefty fine over laybys

BY Australian Retailers Association
09 March 2016

Chrisco Hampers Australia has been ordered to pay a $200,000 penalty for contravening the Australian Consumer Law (ACL).

In proceedings brought by the Australian Competition and Consumer Commission (ACCC),

the Federal Court found the company made false or misleading representation to consumers between January 2011 and December 2013 that consumers could not cancel their layby agreement after making their final payment.

The ACL provides that consumers have a right to cancel a layby agreement at any time prior to delivery of the goods, including after paying their final layby instalment.

The Court also found that Chrisco’s 2014 layby agreement contained an unfair contract term related to its HeadStart Plan, and allowed Chrisco to continue to take payments by direct debit after the consumer had fully paid for their layby order.

Consumers were required to opt out in order to avoid further payments being automatically deducted by Chrisco after their layby had been fully paid.

In concluding that this was an unfair contract term, Justice Edelman considered the agreement as a whole, the transparency of the term, and whether the term caused a significant imbalance in the rights and obligations between Chrisco and its customers arising from the agreement.

“We understand that making purchases by layby agreement is a convenient way for many Australians to shop, particularly for products such as Christmas hampers and presents” ACCC Chairman, Rod Sims, said.

“The Australian Consumer Law provides that layby agreements must be in writing and transparent. Consumers have termination rights at any time before the delivery of the goods, subject to a reasonable termination charge in some circumstances,” Mr Sims said.

“The importance of the penalty imposed by the Court against Chrisco is that it sends a strong message to businesses using layby as a method of sale that they must meet all of their ACL obligations, and do not mislead consumers about their rights.”

Further information on layby agreements is available for consumers and businesses on the ACCC’s website.

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Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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