Infringement notices for contraventions of the Australian Consumer Law (ACL) have been a very effective tool in the ACCC’s arsenal since the beginning of 2011 as both Collingwood Football Club and Coles have experienced this year.
An infringement notice is in simple terms, very much like a parking or speeding fine. The ACCC issues a notice when it has reasonable grounds to believe that a person has contravened the ACL. It is then up to you whether you pay the notice (either because you accept the allegation or don’t want to go to court) or fight the allegation by electing to be prosecuted.
Currently a maximum fine for an infringement notice is $66,000 for a listed corporation, $6,600 for a non-listed corporation and $1320 for an individual.
So, what are your options if you receive an infringement notice?
- Check the date. An infringement notice must be issued within 12 months of the alleged contravention, otherwise it is of no effect.
- Ignore the notice. Not recommended. Failure to comply with an infringement notice will compound your problem. If you do not pay within the time allowed in the notice (28 days) the ACCC may choose to commence proceedings in relation to the conduct alleged in the notice.
- Pay the fine. The payment of an infringement notice cannot be regarded as an admission of a breach or a conviction for an offence under the ACL. Once an infringement notice is paid you cannot be prosecuted for the same conduct.
- Elect to be prosecuted. Don’t be fooled, it is the Courts, not the ACCC which ultimately determines whether you have contravened the ACL. The fact that the ACCC issues an infringement notice demonstrates its belief that you have done something wrong, but just because the ACCC has formed this view, it does not mean that it is right. If you have genuine cause to believe that you have not done what the ACCC alleges, we recommend you seek legal advice in relation to the infringement notice and defending proceedings by the ACCC.
A note on confidentiality
The issue and payment of infringement notices is not confidential. As the regulator the ACCC promotes its actions and successes to keep the public informed of their actions and to deter similar conduct in contravention of the ACL.
The ACCC cannot state that a person is guilty of a contravention because of the payment of an infringement notice. However it can (and often does) issue a press release stating the nature of the conduct alleged and the fact that the business paid the fine. This leaves the public to draw their own conclusions.
When in doubt seek legal advice
If you receive an infringement notice you need to think carefully about what steps to take in response to it. The steps you take may have a significant impact on your business and/or your reputation.
Remember, the ACCC is not permitted to issue an infringement notice unless it has reasonable grounds to believe that you have contravened the ACL. It is worth obtaining legal advice regarding the allegations so you can make an informed decision whether to pay the notice or elect to be prosecuted.