Announcement date
23 November 2025
Link to announcement
Stopping unfair trading: subscription traps and hidden fees targeted
Problem being addressed
Consumer guarantees and supplier indemnification issues are prevalent across the economy, with consumers and suppliers facing challenges in accessing the remedies and indemnification they are entitled to under the Australian Consumer Law (ACL).
Breach of the existing consumer guarantees and supplier indemnification provisions in the ACL gives rise to a private right of action. However, consumers are often unable or unwilling to enforce their rights in court or tribunal, and suppliers and manufacturers have limited incentives to comply with their obligations. Regulators are currently unable to bring proceedings seeking civil penalties or issue infringement notices against parties in breach, or alleged breach, of requirements when:
- suppliers and manufacturers fail to provide a remedy for consumer guarantees failures, when they are legally required to do so
- manufacturers fail to reimburse suppliers for consumer guarantees failures that the manufacturers are responsible for.
Proposal
The objective of the Government’s policy response is to improve the current regime by creating greater incentives for suppliers and manufacturers to comply with their obligations to provide consumer guarantees remedies and supplier indemnification when required.
The Decision RIS considers three options for consumer guarantees and four options for supplier indemnification:
Consumer guarantees – Part A
- Option 1: Maintain the status quo
- Option 2: Education and guidance campaign
- Option 3: Civil pecuniary penalties and enforcement options for not providing a remedy for consumer guarantees failures
Supplier indemnification – Part B
- Option 1: Maintain the status quo
- Option 2: Education and guidance campaign
- Option 3: Civil pecuniary penalties and enforcement options for not indemnifying suppliers
- Option 4: Civil pecuniary penalties and enforcement options for retaliating against suppliers
The Decision RIS, considered feedback from public consultations in 2021 and 2024 and a detailed cost-benefit analysis. It recommended the Government introduce civil pecuniary penalties and enforcement options for both the consumer guarantee and supplier indemnification obligations (Option 3 in both Part A and B) and that these be implemented economy wide. These options are recommended as they were supported by stakeholders and the cost-benefit analysis, and would achieve the government’s objectives, including deterring non-compliance by both suppliers and manufacturers. Penalties should align with those for other key general protections in the ACL such as false or misleading representations and unconscionable conduct.
Assessed Impact Analysis outcome
Compliant Decision RIS
Assessment Comments
The OIA notes the Decision RIS estimates a net benefit of $5.3 billion for consumer guarantees and $225 million for supplier indemnification.