Unfair trading practices: a new focus of consumer protection law
Australia has enacted a broad new prohibition on “unfair trading practices” (UTPs). The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (Cth) (UTP Act) received Royal Assent on 6 July 2026 and will commence on 1 July 2027.
The reforms target what officials and consumer advocates call “dark patterns”: interface designs and sales tactics that nudge consumers into decisions it is claimed that they would not otherwise make.
A note for financial services readers
Before going further, an important point for our many readers in banking, insurance, superannuation and funds management. The reforms do not currently directly extend the parallel consumer protection regime for financial products and financial services under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).
The Treasury has, however, committed to a “Stage 2” that would extend the regime to financial services via amendments to the ASIC Act.
For now, financial services firms should treat the UTP regime as a “when, not if” matter.
Three reforms in one Act
The UTP Act makes three substantive changes to the Australian Consumer Law (ACL):
A general prohibition on unfair trading practices: new s 28B.
Drip pricing reforms: new disclosure obligations for transaction-based charges (new s 48A).
Subscription contract requirements: pre-contract information, ongoing notifications, easy cancellation (new ss 48D, 48E and 48F).
Let’s take each in turn.
Reform 1: The general prohibition on unfair trading practices
The headline reform is a broad new prohibition. New s 28B provides that a person must not, in trade or commerce, engage in unfair trading practices towards a consumer. Conduct is an unfair trading practice only if it is connected with the supply, or offer to supply, goods or services to a consumer and satisfies both limbs of the statutory test (s 28B(2)):
Part 1: Conduct that either (a) manipulates the consumer; or (b) unreasonably distorts the environment in which the consumer makes, or is likely to make, a decision.
Part 2: Conduct that causes, or is likely to cause, detriment (financial or otherwise) to the consumer.
Both parts must be satisfied. But the bar is low. “Detriment” expressly includes financial and non-financial harm, and actual detriment is not required because conduct likely to cause detriment is sufficient. The Explanatory Memorandum gives wasted time, frustration and distress as examples of possible non-financial detriment. There is also no need to prove dishonesty.
The “manipulation” problem
A significant change between the exposure draft (released in February 2026) and the UTP Act is that the word “unreasonably” has been removed from the manipulation limb. The exposure draft prohibited conduct that “unreasonably manipulates” a consumer. The UTP Act simply refers to conduct that “manipulates” a consumer. Consumer groups lobbied successfully for the deletion.
This part of the UTP Act warrants attention from marketers, product designers and UX teams. Marketing routinely seeks to influence consumer decisions through advertising, packaging, pricing, store layout and digital design. The challenge will be distinguishing acceptable persuasion from statutory “manipulation”.
The Explanatory Memorandum defines “manipulation” as “wrongful interference with a consumer that results in a change in the consumer’s behaviour, decision-making or action that is against the consumer’s interests”. That definition leaves two difficult questions unanswered: what counts as being in the consumer’s interests, and who gets to decide?
In The Affluent Society (1958), John Kenneth Galbraith argued that mass-market advertising can create the preferences it satisfies, which he called the “dependence effect”.
As Thomas Sowell observed in Knowledge and Decisions (1980), “The most basic question is not what is best, but who shall decide what is best.” Here, is that the consumer, the business, the regulator or the courts?
What is “legitimate” marketing?
The Explanatory Memorandum says manipulation “is not intended to capture legitimate, reasonable or generally accepted marketing or sales practices.” But “legitimate”, “reasonable” and “generally accepted” are not defined and they are not statutory defences.
For some sales practices it is easy to decide. A truthful, informative advertisement that helps a consumer compare options is plainly legitimate. A countdown timer that falsely claims an offer expires in 5 minutes when in fact it will renew tomorrow is plainly not. But many cases will lie in between. Consider:
Scarcity and urgency cues: “Only 2 left at this price!”; “27 people are viewing this hotel.”
Anchor pricing: showing a struck-through “RRP” alongside the sale price.
Default settings: pre-ticked boxes for extras, opt-out (rather than opt-in) marketing consents.
Personalised recommendations: algorithmic suggestions that exploit known preferences or vulnerabilities.
Loss-framing and social-proof messaging: “Don’t miss out!”; “Customers like you bought…”
Free trials and bundled offers: where the structure of the offer encourages enrolment that the consumer would not pursue on cooler reflection.
Each of these is, on one view, a routine and economically efficient sales technique. On another, each exploits a recognised cognitive bias to nudge consumers in a particular direction. The new prohibition will require courts, the Australian Competition and Consumer Commission (ACCC) and businesses themselves to draw a line somewhere between persuasion and manipulation. Reasonable people will disagree about where it sits.
The grey list
To give some content to the prohibition, the UTP Act includes a non-exhaustive “grey list” of conduct that may amount to unfair trading. Under s 28B(6), conduct that may contravene s 28B includes:
impeding a consumer’s ability to exercise legal rights or seek remedies;
failing to disclose material information to a consumer;
disclosing material information in a complex, ineffective, unclear, unintelligible, ambiguous, untimely or overwhelming way; and
creating an environment (including by using design elements in digital interfaces) which places a consumer under unreasonable pressure or obstructs their decision-making.
The grey list is not a list of automatic contraventions. The UTP Act still requires manipulation or unreasonable distortion, plus likely detriment. But the list shows the kinds of conduct the regulators have in mind. It is a broad category. The second and third items above in particular could be argued to apply to almost any terms-and-conditions document or fine-print disclosure that is “complex” or “overwhelming”.
Section 28B(7) clarifies that nothing in Part 3-1 of the ACL (which deals with the more specific “unfair practices” such as false representations, bait advertising, etc.) limits s 28B by implication. The new general prohibition will therefore stand alongside the existing specific ones.
Reform 2: Drip pricing
The second major reform addresses “drip pricing”: the practice of advertising one headline price and then progressively adding fees during the purchase journey, so that the final price is materially higher than the price first seen. New s 48A seeks to address this practice by requiring certain transaction-based charges to be disclosed alongside a displayed base price. Common targets include event ticketing, airline bookings, hotel reservations and online retail with surprise “service” or “booking” fees.
What is a “transaction-based charge”?
The new s 48A operates on the concept of a “transaction-based charge”. Section 48A(7) defines this as a charge (or a part of a charge) that:
is or may be payable by the purchaser for the supply of the goods or services;
is not an amount payable for the goods or services themselves; and
is, or would be, payable at the same time as an amount payable for the goods or services.
In other words, a transaction-based charge is a charge that rides along with the price of the goods or services: it is paid because the consumer is acquiring the goods or services, but it is technically not the price of those goods or services. Booking fees, “service” or “convenience” fees, mandatory venue levies and the like are the classic examples.
What does the new provision require?
New s 48A applies where a person, in trade or commerce, offers goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption and displays a base price (s 48A(1)).
Where a transaction-based charge applies, the supplier must also display prescribed information about that charge, including the amount of the charge (or, if it cannot be calculated, the method for calculating it), that it is a per-transaction charge, whether it is or may be payable, and whether the displayed base price includes the charge (s 48A(2)).
The required information must be displayed whenever the base price is displayed, and must be displayed legibly, prominently and unambiguously, and in close proximity to the base price (s 48A(3)). The provision is therefore directed at the practice of revealing unavoidable charges only later in the purchasing process.
The base price and the required display may differ at different stages of the purchase journey: a price displayed at the search-results page may legitimately omit information that is then shown at the purchase confirmation page, but the consumer must always have a clear picture of what unavoidable charges will apply.
The new provision is in addition to the existing single-price requirement in s 48 of the ACL.
What is excluded?
The UTP Act carves out certain charges in s 48A(8) so they do not count as transaction-based charges and are not subject to the new display requirement:
optional charges that a consumer can choose to incur or avoid (e.g. an optional travel insurance add-on);
payment surcharges regulated under Part IVC of the Competition and Consumer Act 2010 (i.e. credit card surcharges, already separately regulated);
taxes, duties, fees and levies imposed on the supplier (e.g. GST, where it is the supplier’s liability);
certain supplier amounts paid for taxes or charges under Commonwealth, State or Territory arrangements; and
charges prescribed by regulation.
One important change between the exposure draft and the enacted UTP Act is that shipping charges are no longer expressly excluded. The exposure draft contained a carve-out for delivery costs; the UTP Act does not. That means mandatory shipping fees will need to be disclosed upfront alongside the base price. Optional shipping (e.g. choose between standard and express) remains outside the regime as an optional charge. A shipping charge does not necessarily become “optional” merely because a purchaser can choose between delivery options; the question is whether the purchaser can choose to avoid the charge.
Regulations may prescribe additional categories of charge that come within (or are excluded from) the regime.
Reform 3: Subscription contract requirements
The third reform targets the subscription economy: streaming services, gym memberships, software as a service (SaaS), news subscriptions, “subscribe & save” retail offers, and the like. The concerns are familiar: low-friction sign-up, high-friction cancellation; auto-renewing free or discounted trials that quietly convert to paid subscriptions; long-term lock-ins that consumers forget they are paying for.
The UTP Act replaces the exposure draft’s more prescriptive and sector-specific approach with a simpler, principles-based regime that applies to all subscription contracts. Public utility and healthcare subscriptions, which had been carved out of the exposure draft, are now within the regime. The UTP Act also specifies a number of excluded contracts, including leases, licences in respect of real property, hire-purchase contracts, instalment contracts, certain childcare contracts and certain preschool and school tuition contracts.
The regime imposes three core obligations:
Pre-contract disclosure: before entry, suppliers must disclose prescribed information about price, billing, duration, renewal and cancellation (s 48D).
Ongoing information: suppliers must provide prescribed notices during the subscription, with the scope, timing and content largely left to regulations (s 48E).
Easy cancellation: suppliers must offer an easy-to-find, straightforward cancellation method requiring only reasonably necessary steps. Online cancellation is required where the contract was entered into online or the supplier offers online entry for that kind of subscription (s 48F).
Unlike the general UTP prohibition, the subscription reforms apply to small business subscribers as well as consumers. This is an important extension for business-to-business providers of SaaS and similar subscription products.
Penalties
Civil penalties for breach of any of the new provisions follow the ACL’s existing penalty framework. For a body corporate, the maximum is the greater of:
$100 million per contravention (after the doubling effected by the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Act 2026 (Cth));
three times the value of the benefit obtained from the contravening conduct; or
30% of adjusted turnover during the breach period (if the benefit cannot be determined).
The provisions are enforceable by the ACCC, State and Territory fair trading bodies, and private litigants.
The availability of private rights of action creates real potential for class actions, particularly in subscription and drip-pricing cases where consumer detriment may be small per head but large in aggregate.
Financial services firms should still pay attention
Although the UTP Act does not amend the ASIC Act, financial services firms should not ignore them.
Stage 2 is on its way. Further financial services reform may follow. The Treasury has previously indicated that the Government would consider what changes may be required to the ASIC Act to align the regimes.
Non-financial conduct will be captured. Where a financial services business engages in conduct outside the supply of financial products (for example, general marketing, ancillary services, non-financial subscription offerings, web-store sales of merchandise) the ACL (and therefore the new UTP regime) will apply.
The existing ASIC Act regime still applies. Misleading or deceptive conduct (s 12DA), unconscionable conduct (ss 12CB–12CC), unfair contract terms (ss 12BF–12BM) and false or misleading representations (s 12DB) all remain in force. ASIC has been increasingly creative in deploying these, and the general AFS licensee obligation in s 912A of the Corporations Act 2001 (Cth) to provide financial services “efficiently, honestly and fairly”, against conduct that resembles UTP-style harms.
Reputational and litigation risk. Even without legislative change, plaintiff law firms and consumer advocates will use the new ACL standards to set the bar for what counts as fair conduct across the economy.
What businesses should do now
The 1 July 2027 still seems a way off, but customer journeys, marketing templates, billing systems and contracts have long change cycles.
Here are six concrete steps to consider:
Audit your customer journeys end to end. Map every digital touchpoint and ask, honestly, where you rely on friction, defaults, urgency cues or progressive disclosure. Identify the practices most exposed to a “manipulation” or “grey list” challenge.
Review pricing displays. Identify every transaction-based charge that is currently disclosed late in the funnel. Bring it forward to the first price display, prominently and legibly. Pay particular attention to non-optional shipping, booking fees and venue charges.
Overhaul subscription processes. Match the friction of cancellation to the friction of sign-up. If sign-up is one click online, cancellation must also be one click online. Build the pre-contract disclosure and free-trial-expiry notification flows now.
Train marketing, product and UX teams. Make sure designers understand that “dark pattern” is now a regulatory risk worth $100 million per contravention.
Monitor any ACCC guidance. The ACCC guidance is expected before commencement and will be critical in setting the operational standard.
Watch for Stage 2 and the small business extension. The Government has previously indicated that it will consider whether corresponding amendments should be made to the ASIC Act to align the financial services regime with the ACL reforms. The Treasury has also consulted on extending unfair trading protections to small businesses, including whether small businesses should receive consumer-style protections when acquiring goods and services, reflecting concerns about information asymmetry and bargaining power. Together, these proposals suggest that the current reforms may represent only the first stage of a broader expansion of unfair trading protections. Businesses should therefore design compliance frameworks with potential future expansion of the regime in mind.
A clear regulatory trend
Whatever the eventual scope of the Australian regime, the broader regulatory trend is clear. Regulators around the world increasingly consider that traditional prohibitions on misleading and unconscionable conduct are insufficient to address the modern consumer economy, shaped by algorithms, behavioural design and deliberately managed friction.
This article is general information only and is not legal advice.