The Australian Competition and Consumer Commission (ACCC) will be able to seek financial penalties of up to $1.1 million for corporations and $220,000 for individuals under new powers coming into effect today.
The powers are part of the Federal Government's amendments to the Trade Practices Act, which will include further changes to the Australian Consumer Law throughout 2010.
Though traditionally derided as a toothless watchdog, the ACCC will now be able to issue banning orders for repeat offenders within corporations, public warnings, substantiation and infringement notices to individuals and corporations that are found to have misleading or unconscionable conduct. Misleading conduct or breaches in product safety provisions can attract fines of up to $6600 for corporations and $1320 for individuals.
Under the laws passed last month, the commission will also be able to seek monetary penalties in civil cases, as well as refunds for consumers where necessary.
"The new law provides a more responsive national approach, through which the Australian Competition and Consumer Commission will be able to deal more effectively with matters that affect many consumers, particularly vulnerable consumers," ACCC chairman Graeme Samuel said in a statement.
"Vulnerable and disadvantaged consumers will particularly benefit from the ACCC's new ability to seek redress through the courts for consumers who are not included in a particular legal action," he said.
This will allow the consumer watchdog to retroactively refund consumers affected by misleading conduct even if they aren't involved in the case.
Future amendments to come into effect on 1 July will allow the ACCC to address unfair contract terms for consumers.
In the Productivity Commission's review of Australia's Consumer Policy Framework, it found that the implementation of a national consumer law could save Australian consumers between $1.5 billion and $4.5 billion a year.
However, Independent senator Nick Xenophon said the the amendments hadn't not gone far enough, and that it was an "opportunity lost" for the government.
"While this bill is designed to address unfair contract terms and includes penalties, enforcement powers and consumer redress options, I believe this bill in its current form does not truly meet its intent," he told the Senate last month.
The commission was slammed by the Senate in 2008 for its inquiry into grocery pricing, and is currently gearing up to regulate NBN Co's wholesale pricing for the fibre-based National Broadband Network.
Most recently, the ACCC forced Nokia to extend the basic repair warranties offered by local operator Fone Care, but did not financially penalise the company for misleading conduct.