The customer is always right… Right?

As SmartCompany reported at the beginning of last December, a new consolidated set of national consumer laws took effect across Australia on January 1.

While most of the regulations are revisions of existing federal and state laws – the main changes seemed to aim at tying down definitions of things like unconscionable conduct – there are few “gotchas” which even the most well intentioned business owner or manager needs to be aware of.

For most businesses the most difficult aspect will be the ACCC’s definition of “unsolicited supplies”. It appears the main thrust of the changes is to tighten up on invoice scams and dodgy door-to-door sales people, but the Commission’s interpretation of what is unwanted work may be a bit too restrictive in the real business world.

“If the client didn’t ask for it, they don’t have to pay” is the ACCC’s interpretation of the new laws. On the face of it, this black-and-white view seems fair enough, but often what the client and supplier agreed isn’t so easily determined.

In fields where quoted work is the norm, the “unsolicited supplies” definition means the ACCC will now advise your clients not to pay any part of a bill they believe wasn’t authorised.

Most scrupulous service providers already check with customers before going ahead with additional work. The example in the ACCC’s handbook of a car repairer is a good case, as most mechanics already call up customers should they find unforeseen problems which will add to the bill.

One interesting aspect of the ACCC’s interpretations is how they will fit in with the duty of care that mechanic, just to choose one example, has to their customer if they find the car is unroadworthy; do they repair the dangerous items and wear the bill or do they let the customer drive off should they be unable to agree on the cost of making the vehicle legal and safe?

A more common example is the tradesman who finds midway through the quoted job that there’s a serious problem that prevents them completing the agreed work.

Does this mean the plumber who finds a tree root blocking a pipe, a carpenter who uncovers an extensive termite infestation or a computer technician who discovers a dying hard drive simply down tools until an agreement on the cost of the extra works has been agreed?

These are the sorts of issues where the ACCC’s black and white interpretation of the law may come unstuck.

Another area where the narrow definition of the ACCC will fall down is where customers say “just fix it” with an ensuing argument over what was fixed. Advising the customer not to pay the bits they believe are excessive puts an unfair burden on the merchant and may not stand up to review by the courts.

It’s safe to predict the ACCC will find their interpretations being challenged in the courts sooner rather than later, though for the moment businesses will have to live with these definitions.

As a consequence businesses have to be precise in defining what work is covered in a quotation and scrupulously note every conversation and instruction from your clients, particularly ensuring you have clear approval for any works that might fall outside your initial agreement.

For businesses operating in areas where it’s difficult to give a fixed quote with a defined scope of works such as emergency plumbing or computer repairs, it’s probably going to be best to accept the uncertainty and just build an extra overhead allowing for these disputes into your cost structure.

Apart from the “unsolicited supplies” aspect, most of the guidelines around these rules are general commonsense and there’s little that’s really changed for ethically run businesses.

The full guide to the new regulations is available for download from the ACCC website. You and your staff – particularly your sales team – need to read and understand how these rules affect your business.

Paul Wallbank is one of Australia’s leading experts on how industries and societies are changing in this connected, globalised era. When he isn’t explaining technology issues, he helps businesses and community organisations find opportunities in the new economy.