Understanding The Fair Trading Act 1987 (NSW): Compliance For Businesses

Starting or growing a business in New South Wales is exciting - and making sure you’re compliant from day one is one of the best ways to build trust and avoid costly problems later.

One law you’ll hear about early is the Fair Trading Act 1987 (NSW). It sits alongside the Australian Consumer Law and gives NSW regulators the tools to protect consumers and keep the marketplace fair.

In this guide, we’ll explain what the Fair Trading Act actually does, how it works with the Australian Consumer Law (ACL), and the practical steps you can take to stay compliant in everyday operations.

We’ll keep it simple and actionable so you can focus on running your business with confidence.

What Is The Fair Trading Act 1987 (NSW)?

The Fair Trading Act 1987 (NSW) is the legislation that establishes the consumer protection framework in New South Wales. In short, it:

• Applies the Australian Consumer Law (ACL) as a law of NSW (often called the Australian Consumer Law (NSW)).
• Sets up the NSW Fair Trading regulator’s powers to investigate, educate and enforce consumer protection in the state.
• Allows NSW to make certain local rules (for example, information standards and codes of practice made under the Act) and take action on unfair trading in NSW.

Think of the ACL as the national rulebook for fair dealing with customers, and the Fair Trading Act as the NSW law that “switches it on” locally and gives NSW Fair Trading the tools to enforce it.

That means most day-to-day obligations you’ll recognise - such as not misleading customers, honoring consumer guarantees, price transparency, and rules around unsolicited sales - come from the ACL. NSW Fair Trading enforces those obligations in NSW using the powers in the Fair Trading Act.

How Does It Interact With The Australian Consumer Law (ACL)?

Understanding the split between the ACL and the Fair Trading Act helps you stay accurate about your obligations:

• Misleading or deceptive conduct: Prohibited by section 18 of the ACL. This captures statements or silence that lead customers into error. A quick refresher on section 18 explains how broad this obligation is.
• False or misleading representations: Covered by section 29 of the ACL. This includes statements about price, quality, origin, testimonials and more. If you advertise or label products, it’s worth revisiting section 29.
• Pricing and advertised offers: Pricing must be clear and accurate under the ACL (and related regulations). If you run sales, use comparison pricing, or show “from” prices, make sure you’re across advertised price laws.
• Consumer guarantees: Goods must be of acceptable quality and match their description; services must be provided with due care and skill. These guarantees are automatic under the ACL.
• Unsolicited consumer agreements and cooling-off: Door-to-door and some telemarketing sales are regulated under the ACL with strict rules around disclosure and cooling-off periods.
• Product safety and recalls: Safety standards, bans, recalls and mandatory incident reporting sit under the ACL, administered nationally (primarily by the ACCC) and enforced locally by NSW Fair Trading.

The Fair Trading Act 1987 (NSW) then provides the NSW machinery to educate, investigate and, where needed, issue penalties, accept undertakings, or commence proceedings in relation to these ACL obligations.

Bottom line: comply with the ACL in your sales and marketing, and expect NSW Fair Trading to be the local point of contact for advice, complaints and enforcement in NSW.

What Does Compliance Look Like Day-To-Day?

Compliance isn’t about ticking boxes once - it’s about building fair and transparent practices into your operations. Here’s what that looks like in practice.

1) Make Accurate Claims In All Channels

Every claim you make (website, socials, in-store, packaging, quotes, emails) should be true, clear and not misleading. Avoid fine print that contradicts key statements, and be careful with “was/now” pricing, savings claims and testimonials.

If you’re running promotions or showing shelf labels, ensure your price displays match at the point of sale and are consistent with advertised price laws.

2) Build Your Policies Around ACL Consumer Guarantees

Design your returns, refunds and repairs processes around the ACL’s consumer guarantees. Avoid blanket “no refunds” wording - it’s likely to mislead. Clear, accessible terms (for example, Terms of Trade for service businesses or website terms for ecommerce) help set expectations and reduce disputes.

Ensure frontline staff know when customers are entitled to a remedy, and how to escalate tricky scenarios.

3) Keep Documentation You Can Stand Behind

Use accurate product descriptions, up-to-date manuals or instructions, and correct safety warnings. If your goods are subject to standards or bans, confirm compliance before you sell and keep records of checks and supplier assurances.

4) Train Your Team

Everyone who interacts with customers should understand the basics of the ACL. A short induction and refresher training on fair sales practices, pricing accuracy and refunds handling goes a long way.

5) Handle Complaints Early And Fairly

A simple complaints workflow is invaluable: log the issue, assess rights and remedies, and resolve promptly. Many disputes can be settled quickly if you act in good faith and communicate clearly.

6) Stay Alert To High-Risk Practices

• Comparative advertising: Keep comparisons current and backed by evidence.
• Scarcity and urgency claims: Only say “limited stock” or “ends today” if it’s true.
• Pre-ticked boxes and add-ons: Extra charges should be opt-in.
• Unfair terms risk: Small print must be fair and balanced under the ACL’s unfair contract terms regime (be cautious with broad disclaimers or one-sided indemnities).

7) Get Your Online House In Order

If you sell or collect information via a website or app, publish clear rules for customers and users. Well-structured Website Terms and Conditions and a transparent Privacy Policy support compliance and customer trust.

A quick note on privacy: under the Privacy Act 1988 (Cth), many small businesses are exempt from the full Australian Privacy Principles unless an exception applies (for example, health service providers or businesses trading in personal information). Even if you’re exempt, it’s common and sensible to publish a Privacy Policy - customers expect it, and some platforms and partners require it.

Which Businesses And Activities Does It Cover?

If you trade in NSW and deal with consumers, you’re within scope. Your obligations don’t depend on your structure, but your structure does affect how you manage risk and governance. Here’s how this typically plays out.

Sole Trader

You and the business are the same legal entity. You’re responsible for day-to-day compliance and any liabilities that arise.

Partnership

Partners share control and responsibility for compliance. A partnership agreement can help align processes and decision-making, but you still need to follow the ACL in your dealings with customers.

Company (Pty Ltd)

A company is a separate legal entity. Directors must ensure the company has compliance systems in place, from accurate marketing to complaint handling. Consider a customer contract framework, clear internal policies, and good record-keeping so the company can demonstrate it meets its obligations.

Franchises

Both franchisors and franchisees must comply with the ACL, and franchisors also have obligations under the national Franchising Code of Conduct. Franchise marketing, pricing displays and customer guarantees still need to be ACL-aligned.

Whatever your structure, the practical steps are similar: truthful marketing, ACL-aligned remedies, solid policies, trained staff and accurate records.

Key Legal Documents To Support Compliance

Good documents don’t replace compliance - they help you achieve it consistently. Consider the following as part of your toolkit.

• Customer Terms (online or offline): Clear terms for sales or services set expectations on price, delivery, scope, and remedies. For ecommerce, strong Website Terms and Conditions help define the customer relationship and reduce disputes.
• Refunds and Returns Policy: A plain-English summary of how you handle repairs, replacements and refunds in line with the ACL’s consumer guarantees.
• Privacy Policy: Explains what personal information you collect, how you use it, and how customers can contact you. Even where not legally required, a straightforward Privacy Policy is best practice and often expected.
• Terms of Trade or Service Agreement: For service businesses, well-drafted Terms of Trade can define deliverables, timelines, payment, and liability in a transparent and fair way.
• Supplier Agreements: Lock in product specs, safety assurances, and responsibility for defects or recalls. This helps you deliver ACL-compliant goods to customers.
• Employment Contracts and Staff Handbook: If you have a team, consistent onboarding with an Employment Contract and basic policies (pricing accuracy, complaint handling, refunds process) supports day-to-day compliance.

Not every business will need every document on day one, but most will benefit from a tailored combination that reflects how you actually operate. The aim is clarity, fairness and consistency across your customer touchpoints.

What Happens If There’s A Complaint Or Investigation?

NSW Fair Trading handles enquiries and complaints from consumers and can investigate potential breaches. Here’s how to respond if your business is in the spotlight.

Respond Early And In Good Faith

Address customer concerns quickly. Many issues end here if you acknowledge the problem, apply the ACL correctly, and offer the appropriate remedy.

Keep Clear Records

Maintain records of advertisements, product specifications, transactions, customer communications, refunds and repairs. Good paperwork helps resolve complaints and demonstrate compliance if regulators ask questions.

Take Regulator Contact Seriously

If you receive an information request, warning, penalty notice or other communication from NSW Fair Trading, respond on time and consider getting legal advice so you can provide accurate information and implement any required changes.

Fix Root Causes

If a complaint reveals a process gap (for example, a misleading marketing claim or a recurring product issue), update your materials, retrain staff and adjust supplier arrangements so it doesn’t happen again.

Marketing Claims: A Common Pressure Point

Many matters start with claims in ads, socials or on packaging. It’s worth sanity-checking common risk areas against the ACL, including misleading or deceptive conduct and false representations, before a campaign goes live.

Key Takeaways

• The Fair Trading Act 1987 (NSW) applies the Australian Consumer Law in NSW and empowers NSW Fair Trading to educate, investigate and enforce consumer protections locally.
• Most day-to-day obligations - truthful marketing, consumer guarantees, accurate pricing, unsolicited sales rules and product safety - come from the ACL and are enforced in NSW under the Fair Trading Act.
• Build compliance into daily operations: accurate claims, ACL-aligned refunds, trained staff, sound supplier arrangements and clear records.
• Use plain-English documents - such as Terms of Trade, Website Terms and Conditions and a practical Privacy Policy - to set expectations and manage risk fairly.
• If you receive a complaint or regulator contact, respond promptly, apply the ACL correctly and fix any root causes to prevent repeat issues.

If you’d like a consultation on compliance with the Fair Trading Act 1987 (NSW) and the Australian Consumer Law, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.