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 facilitate this we follow an escalation model of compliance and enforcement. As a trader’s attitude to compliance deteriorates, our regulatory response escalates.
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, as well as any suspected breaches of the laws we administer.
Our compliance and enforcement actions are designed to:
- encourage businesses to follow the law
- most effectively protect the rights of consumers and businesses
- maintain 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
- finding solutions for less serious matters.
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 we have admissible, substantial and reliable evidence
- 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 and standards.
Penalties we impose
We can take the following enforcement actions without needing to apply for a court order.
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.
We may issue an infringement notice or a civil penalty fine for some types of breach.
These will be for matters that:
- are less serious types of breach
- are isolated incidents for the business
- won’t need a detailed or complex investigation
- don’t have many defences available to the business
- are relatively common in the marketplace.
An enforceable undertaking is a legally binding agreement that a business will stop doing certain activities. Undertakings can also include a binding agreement that the business will do certain things such as giving affected consumers redress, providing their staff with training about consumer protection laws, putting in place new business procedures, and contributing to the cost of identifying and rectifying the breach.We can take the matter to court if the business does not obey the undertaking.
Generally, we will use anundertaking instead of court action if:
- we have never carried out enforcement action against the business for similar conduct
- the business is unlikely to reoffend.
We may publicise an undertaking in the media.
If they do reoffend, or fail to keep to the terms of the agreement, the court can enforce the original undertaking, as well as order the business to pay:
- a security bond.
Public warnings and naming
Public warnings and naming are serious actions because they affect the viability and profitability of businesses. We will only do them 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 a consumer product or service risks widespread harm
- a strong reason to warn the public about the business or their conduct.
We can apply to a court to carry out the following enforcement actions. They will decide whether to issue an order based on the strength of our application.
Prosecution or tribunal action
We can prosecute or launch 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 in the Queensland Civil and Administrative Tribunal usually relates to breaches in industries 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.
If the court issues an injunction against an activity, the business must not continue to carry it out.
We will apply for an injunction if the alleged conduct is:
- serious and ongoing or has the potential to recommence
- likely to cause wide spread or significant detriment
- 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 (such as 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.
A court can order a fine (‘pecuniary penalty’) to:
- punish an activity
- deter the business from reoffending.
Under some OFT legislation the court can order civil fines. Non-payment may result in seizure of assets, sale actions or bankruptcy proceedings.
Unlike other OFT legislation, the court can order criminal fines, which may lead to imprisonment if unpaid.
A court can disqualify a person from managing a corporation. They can issue the order for as long as they consider appropriate.
We pass on all disqualification orders to the Australian Securities and Investments Commission (ASIC). ASIC keeps a register of disqualified people.