The three guarantees, in the Act’s words
Section 60 of the Australian Consumer Law says that when services are supplied to a consumer in trade or commerce, “there is a guarantee that the services will be rendered with due care and skill.”
Section 61 adds two guarantees about purpose. If a consumer makes known a particular purpose for the services, they must be reasonably fit for it. And if a consumer makes known “the result that the consumer wishes the services to achieve”, to the supplier or to whoever handled the earlier negotiations, the services must be of a kind that might reasonably be expected to achieve it.
Section 61 does not apply where the circumstances show the consumer did not rely on the supplier’s skill or judgement, or that it was unreasonable to rely on it. Section 62 adds a guarantee that services will be supplied within a reasonable time when no time was fixed or agreed.
AskWhat result did I tell them I wanted, and to whom did I say it?
The ACCC adds that the fitness guarantee also applies when a consumer buys a service on the business’s advice, or when the provider advertises that the service can be used for a particular purpose.
What was said, and the rule it meets
A course or a mentoring program is sold through what is said about it. This table matches the usual places a promise is made with the consumer law rule the ACCC applies to each.
| Where the promise was made | The rule | The question in the margin |
|---|---|---|
| An ad, a webinar, a testimonial or a salesperson’s pitch | The ACCC says any claim about the value, benefits or performance of a product or service must be accurate, truthful and based on reasonable grounds, whether it is made in advertising, by staff in person or in writing, on social media, in testimonials or on a website. It makes no difference whether the business meant to mislead. | What were the grounds for that claim? |
| What was left unsaid | The ACCC says silence can be misleading, especially where a business gives some information but leaves out important details relevant to the decision. | What did I need to know that nobody mentioned? |
| “Free” with conditions in the fine print | The ACCC says fine print must not conflict with an ad’s overall message, and that an ad calling something free while the fine print mentions an extra payment is likely to be misleading. | What did the free session lead to paying for? |
| The way the coaching was delivered | Due care and skill: in the ACCC’s words, the work must be at least as good as what a competent provider with average skills and experience would provide. | Would a competent provider have done it this way? |
| A program changed after it was paid for | The ACCC says that if a business makes a material change to a service it agreed to supply over a period, such as replacing in-person lessons with online ones, consumers are likely to be entitled to the remedies for a major problem. | Is this still the program I agreed to? |
| A “no refunds” term | The ACCC says a business cannot take away the consumer guarantees by displaying a ‘no refunds’ sign or by saying it is not responsible for problems, and that misleading consumers about their rights in these ways is against the law. | Does this term try to remove a right the law gives? |
Major and minor problems
The ACCC’s remedies page explains what makes a problem major and what happens when a minor one is not fixed.
AskIs the problem one I would have walked away over, had I known?
Where the guarantees stop
The ACCC says the consumer guarantees do not apply to financial products such as insurance, which other laws cover. Advice about a financial product is a matter for ASIC and AFCA instead; the page on what to do if something went wrong sets out the routes.
A course bought for a business can still be covered. The ACCC says a service bought for business use is covered when it costs less than $100,000 including GST, or is commonly bought for personal, domestic or household use, subject to exceptions.
Beyond the guarantees, the ACCC describes unconscionable conduct as behaviour so harsh that it goes against good conscience, and lists factors a court may weigh, including undue influence, pressure or unfair tactics by the stronger party, and whether that party acted unreasonably in not telling the other about key risks it should have known they were unaware of.
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