TPA compliance systems

Anyone who ventures into the Australian Competition and Consumer’s (ACCC’s) website will observe the constant stream of press releases demonstrating a stream of enforcement activity that this vigorous regulatory agency is bringing against companies.

Behind each of these press releases, which reflect on a company’s reputation through the bad press, there is generally also the untold story of distracted executive time and costly lawyer’s fees either defending a court action or negotiating an enforceable undertaking with the ACCC.

Many of the cases involve breaches of the Trade Practices Act (TPA) whereby companies, often inadvertently, put out misleading promotional material, make a claim about their product or service that they can’t substantiate or have sold a product that is supposed to meet the requirements of a mandatory standard.

The sad thing in most of these cases the companies concerned had no compliance system or the one they had was ineffectual. Ignorance of the law is not an excuse with the ACCC and it doesn’t have to prove intention to break the law. The ACCC can be quite unforgiving if the law is broken and as noted above is pretty active in the marketplace. If the companies in the spotlight had gone to the relatively small expense of setting up a trade practices compliance program that identified their trade practices risks and then had some controls developed to manage those risks they could reduce the risk the embarrassment and the costs of defending an ACCC action. So the simple message is if you don’t have a TPA compliance system don’t put it of till tomorrow: do something today.