About fair trading enforcement and processes

The Office of Fair Trading's (OFT) goal is to achieve a fair and safe marketplace. We recognise that most businesses want to comply with the law and to help with this we follow an escalation model of compliance and enforcement. As a trader’s attitude to compliance with the law decreases, our response to ensure they follow the law increases.

Our compliance policies and procedures set out how we enforce the law. These help us assess, inquire into, analyse and address complaints from consumers and business. They also help us investigate any incidents where a business may not have followed fair trading laws.

Our compliance and enforcement actions are designed to:

• encourage businesses to follow the law
• most effectively protect the rights of consumers and businesses
• maintain and build community confidence in a fair and safe marketplace.

We use a range of activities and powers to promote and enforce the law. These include:

• educating businesses and consumers about the law
• working with industry groups to promote good practices
• licensing or registering participants of some industries and not-for-profit sectors
• taking court action for serious or repeated breaches of the laws we administer
• addressing less serious matters with less severe solutions.

Our range of enforcement options and remedies include:

• official warnings
• infringement notices (fines)
• civil penalty notices
• enforceable undertakings
• administrative actions (show causing, conditioning, suspending or cancelling a licence or registration)
• public warnings or naming
• court orders and injunctions
• court or tribunal action (prosecution).

In deciding on an enforcement action, we will always:

• base our decision on the type of breach, circumstances and public interest
• always consider every option, including court or tribunal action
• make sure our evidence is:
  • able to be admitted in court
  • substantial (of considerable importance)
  • reliable
• use public resources efficiently
• make sure the severity of enforcement action we take matches the severity of the breach
• not proceed without a reasonable prospect of success
• be accountable and transparent in all our actions and decisions.

Download our Compliance and Enforcement Policy.

Penalties we impose

We can take the following enforcement actions without a court order.

Official warnings

We will give an official warning if a business:

• has committed a minor or technical breach
• doesn’t seem to have intended to breach a law or act dishonestly
• cooperates with our investigation
• takes rapid action to minimise the risk of a repeated breach.

Infringement notices

We may issue an infringement notice or a civil penalty fine for some types of breach.

These will be for matters that:

• are relatively minor in isolation breaches
• are isolated incidents for the business
• are first offences
• can be dealt with without the need for costly court or tribunal action
• are relatively common in the marketplace.

Enforceable undertakings

An enforceable undertaking is an agreement that is entered between the Commissioner for Fair Trading and a business. It generally means that the business is willing to work with the OFT to change or stop doing certain activities that may contravene a law.

Undertakings are enforceable which means that if the business does not honour undertakings they have been given, the OFT can seek orders from the court for the business to cease or commence certain activities and order the business to pay:

• compensation
• a fine
• a security bond.

Often undertakings can include giving affected consumers redress, providing staff with training about consumer protection laws, putting in place new business procedures, and contributing to the cost of identifying and remedying the breach.

Generally, we will use an undertaking instead of court action if:

• we have never carried out enforcement action against the business for similar conduct
• the business is unlikely to reoffend.

If it's in the public's interest we may make information about an undertaking known in the media.

View the OFT Enforceable undertakings register.

Public warnings and naming

A public warning and naming are serious actions because they can affect the ability of a business to operate within the marketplace. The OFT will perform these only in limited situations.

Before we take either action, we must consider if we have:

• clear evidence of a business engaging in deliberate and widespread misconduct
• compelling information that a consumer product or service risks widespread harm
• a strong reason to warn the public about the business or their conduct.

Read the list of businesses and traders to avoid.

Court orders

We can apply to a court to make certain orders. The court will decide whether to issue an order or a fine based on the strength of our complaint or application.

Prosecution or tribunal action

We can prosecute or commence tribunal action if:

• the alleged breach is in the most serious categories of offending
• a business repeatedly reoffends or breaks an enforceable undertaking
• the business elects to take the matter to court
• it would be in the public interest.

Breaches of our laws generally lead to prosecution in a court, rather than action in a tribunal.

Tribunal action by the OFT is started in the Queensland Civil and Administrative Tribunal and will relate to breaches by a person in an industry we regulate. Depending on the industry, the tribunal can make a number of orders, including disqualifying a person from holding a licence. They can issue the order for as long as they consider appropriate.

Injunctions

A court may grant an injunction against a person. Their business must then refrain from engaging in certain conduct.

We will apply for an injunction if the alleged conduct is:

• serious and ongoing or has the potential to recommence
• likely to cause widespread or significant damage if it continues
• still ongoing despite any previous enforcement action from us.

Compensation or redress orders

These types of orders require the business to carry out any of a range of actions as a remedy for their conduct against customers or anyone who has been negatively impacted.

The court may order the business to:

• return money or property
• pay restitution
• perform a service
• repair or replace a product.

The court can also void, vary or refuse to enforce the terms of a contract.

Adverse publicity orders

An adverse publicity order would require the business to:

• disclose to specific people (e.g. their customers) about the nature of their breaches
• publish an advertisement (at their own expense) to warn the general public.

The court will set out the content and audience of the disclosure.

Fines

A court can order a fine (‘pecuniary penalty’) to:

• punish an activity
• prevent the business from reoffending.

Under some OFT legislation a court can order civil fines. If the business does not pay, their assets may be taken, sales actions may be required, or they may have to start bankruptcy proceedings.

Under other OFT legislation the court can order criminal fines, which may lead to imprisonment if the business does not pay.

Disqualification

A court can disqualify a person from managing a corporation for as long as they consider appropriate. The Australian Securities and Investments Commission (ASIC) keeps a register of disqualified people.

View the ASIC banned and disqualified register.