Finally a ban on unfair trading – but big gaps remain

Australia’s new unfair trading laws are a major step forward, but gaps covering financial services, personalised pricing and exploitative product design could leave consumers exposed to serious harm.

Australia has almost caught up to Europe on unfair trading laws with the recent passage of the Competition and Consumer Amendment (Unfair Trading Practices) Act. From next July, tricking consumers through confusing interfaces, locking them into inescapable subscriptions, or exploiting cognitive biases to empty their wallets will break the law.

It should not have taken this long, and the job isn’t finished. That unfair commercial conduct ought to be illegal is surely an obvious proposition. Yet Australia has spent 50 years dithering. Such prohibitions have been raised repeatedly, from the 1970s Trade Practices Act debates through to the 2010 Australian Consumer Law, only to be diluted under industry lobbying or shelved. Business groups claim a general unfairness prohibition is too vague and costly. Each time, the government subordinated consumer protection to industry objections, producing narrower laws than proposed. Though 50 years overdue, this year’s Act marks genuine progress, yet structural gaps remain.

What the law does

The Act amends the Australian Consumer Law through a two-part test. Conduct is banned if it manipulates consumers or distorts decision-making and causes, or is likely to cause, financial or psychological detriment. Actual harm need not be proved; likely harm suffices.

The explanatory memorandum targets countdown timers on deals that never expire, subscription cancellations engineered to exhaust consumers, charges sneaked in at checkout, and interfaces designed so the business-favourable option is impossible to miss. The OECD calls these ‘dark commercial patterns’. They are engineered, not accidental.

Australia is not the first to act. The EU, UK, Canada and US all have unfairness provisions across their consumer laws. The gap between Australia and comparable jurisdictions should have shamed our legislators decades ago.

Financial services still not included

Here is the failure 50 years of reform hasn’t fixed. Europe’s Unfair Commercial Practices Directive applies to all business, banks included. Australia’s new law does not touch financial services, because they sit outside the Australian Consumer Law. Even now, the sector with the highest stakes and most sophisticated manipulation is not covered.

This is not an oversight, but a policy choice made against explicit warning. When financial services regulation was last reviewed, consumer advocates argued that excluding it from consumer law and the ACCC’s reach would invite regulatory capture. The 2018 Banking Royal Commission proved them right – years of misconduct ASIC had failed to curb. Former ACCC chair Allan Fels told the commission that ASIC had been weak and ineffective, and general consumer protection laws should apply.

The precise gap

The ASIC Act already mirrors key ACL protections: misleading conduct, unconscionable conduct, unfair contract terms. But the new unfair trading prohibition has not been mirrored in the ASIC Act. Would this new unfairness test have caught conduct that existing law did not?

The cost is measured in billions. Assistant Treasurer Daniel Mulino announced reforms forced by the collapse of Shield and First Guardian schemes, in which 12,000 Australians lost more than $1 billion in retirement savings. Social media ads named ‘Find Your Lost Super’ gave lead generators access to steer consumers into risky products. Was this conduct – using manipulative targeting and interface design to exploit search behaviour and cognitive limitations – covered by existing law, or does it represent a gap the new unfairness test was designed to fill?

The government’s response – banning unlicensed real-time contact, tightening anti-hawking rules, and forcing repayment of capital losses where a breach is found – is welcome but also an admission of failure. It is a sector-specific patch bolted on after damage was done.

The case for extending consumer law to financial services is strong. In the EU, UK and Canada, general consumer law applies concurrently alongside sector-specific regulation, providing an enforcement backstop if the specialist regulator fails. When the TGA failed to act on Nurofen, the ACCC stepped in. The same concurrent jurisdiction should apply to financial services, so that should ASIC fail, as the royal commission found it repeatedly did, the ACCC can.

The personalised pricing trap

A second major gap opens as technology enables targeted pricing. The new law may address some personalised pricing abuse, but lacks mandatory disclosure of personalised pricing and its basis – now standard in comparable jurisdictions.

Modern data collection allows businesses to set different prices based on personal data about willingness to pay, shopping habits, financial vulnerability or personal circumstances. Consumers reasonably expect the price they see is the same as any other consumer would see. When a retailer charges one person more based on data about their wealth or distress, the consumer cannot avoid the higher price if it is hidden.

The new law’s two-limb test may apply to undisclosed personalised pricing but will be contested. Proving decision-making was distorted requires evidence about what the consumer would have done if they had known the truth.

The US has released definitive policy: the Federal Trade Commission’s August 2026 Proposed Enforcement Policy Statement requires disclosure of personalised pricing, its basis, and data types. Failure likely constitutes unfair or deceptive practice under Section 5. The EU’s forthcoming Digital Fairness Act now expressly bans unfair personalisation practices.

Australia should adopt the US and EU approach: mandatory disclosure of personalised pricing, its basis and the data used.

Products designed to exploit

A third gap exists. Some products are engineered to exploit. Poker machines and online gambling use near-miss effects, variable reward schedules, and displays that disguise losses as wins – practices that are plainly unfair.

The new law’s two-limb test targets exploiting cognitive biases and causing harm. Unlike personalised pricing, gambling does not escape through financial services exemption. The question is whether gambling design is sufficiently manipulative to be unfair.

Using the new prohibition against design is untested and contested. But treating design itself as unfair trading should be pursued. Harm-minimisation features and spending limits should not wait for a test case.

Three reforms are overdue

First, the unfair trading prohibition must be extended to financial services and mirrored in the ASIC Act. Consumer law should apply concurrently with sector-specific regulation, so the ACCC can act should ASIC fail.

Secondly, the law should require clear and conspicuous disclosure of personalised pricing and its basis. Consumers cannot avoid unfair pricing they do not know is occurring.

Thirdly, for products designed around exploitation, The design of poker machines and online gambling products should be tested against the unfairness standard.

Fifty years after the case for banning unfair conduct became obvious, the game still isn’t fair. The next Shield or First Guardian is only a matter of time.