Investigating your business

NSW Fair Trading inspects businesses either by appointment, or without prior notification to:

• check if they are complying with the law
• provide education, or
• act when the law has been breached.

We may investigate or protect consumers by removing unsafe products if:

• we detect a breach of legislation
• there has been a consumer complaint, or
• there is a proactive, intelligence driven compliance operation targeting high-risk sectors.

Conduct you can expect from investigators

Investigators are bound to follow their compliance role and must uphold organisational values. They must make sure their decisions and actions are:

• reasonable
• fair
• appropriate to the circumstances.

They must consider all relevant facts, legislation, policies and procedures before finalising their investigations and making recommendations.

Can an investigator enter my premises

 The Fair Trading Act 1987 (the Act) permits an investigator to enter, at a reasonable time, any place where he or she believes on reasonable grounds to be a place where:

• goods are manufactured, prepared or supplied
• services are supplied or arranged.

The Act also permits an investigator to enter a premises where he or she believes, on reasonable grounds, that there are documents evidencing the contravention of laws administered by NSW Fair Trading.

The power to enter does not include a place that is a dwelling-house or other residential premises unless:

• the occupier consents, or
• some manufacture, business or trade takes place on the property.

Can investigators take documentary evidence from my business, or anyone related with my business

Investigators will normally make copies or take extracts of documents, however documentary evidence may also be seized if an investigator believes on reasonable grounds it may be concealed, lost or destroyed.

If we reasonably believe a person, organisation or third party can provide information or evidence about a business’s breach of the law, an investigator can also:

• request this information be provided voluntarily, or
• compel the person to do so by giving them written statutory notice.

Evidence seized for the purpose of investigation must be returned to the owner if it is no longer required for the investigation.

Can investigators take goods or property from my business

Investigators who reasonably believe a person or organisation can provide information or evidence about a breach of the law may:

•  take any goods, or partly manufactured goods, for which he or she paid a fair price
• take a sample of anything from which goods are manufactured or produced in that place
• seize, detain or remove any consumer goods in that place that:
  • do not comply with a safety standard within the meaning of section 2 (1) of the Australian Consumer Law (ACL)
  • are the subject of an interim or permanent ban
  • are the subject of a recall notice, or
  • the investigator believes, on reasonable grounds, are or are likely to become unsafe.

Receipts must be issued for any seized, detained or removed goods.

An investigator may issue an embargo notice to the occupier of a premises in relation to consumer goods or products-related services if they are manufactured, prepared, stored or supplied in trade from the premises if they:

• do not comply with a safety standard under section 2(1) of the ACL
• are the subject of an interim or permanent ban
• are the subject of a recall notice, or
• are, or are likely to become, unsafe.

Additionally, an embargo notice may only be issued if it is not practical to seize and remove the consumer goods or equipment used in the manufacturing, processing, storage or supply of the consumer goods or goods-related services.

Goods or property seized for the purpose of investigation must be returned to the owner if it is no longer required for the investigation. 

Can businesses refuse to cooperate with the investigator

It’s an offence to:

• stop investigators from doing their job
• not provide an investigator with reasonable access and assistance so they can effectively undertake an investigation.

The penalties for hindering or obstructing an investigator include a fine up to $2,200, up to 6 months imprisonment, or both.

What can businesses do to cooperate with an investigation

Your business can help by:

• providing accurate and reliable advice and information when required
• acting ethically, fairly and honestly in all dealings with investigators
• not offering investigators gifts or other benefits designed to improperly influence the conduct of their duties.

If you are convicted of an offence under a law administered by NSW Fair Trading, the Court may order you to reimburse the Department for the costs and expenses reasonably incurred during the investigation. These costs and expenses can include

• costs relating to the purchase, inspection, testing, transportation, storage, and disposal of goods, as well as auditing financial records
• costs relating to the purchase, inspecting, testing, transporting, storing and disposing of goods, and auditing of financial records
• requesting an enforceable undertaking, a legally binding agreement entered into by consent to do certain things so you will comply with the law
• an injunction to stop you continuing to do something which breaks the law, for example, you may have to cancel advertising considered to be misleading or even force you or your business to cease trading
• issuing a public warning notice
• prosecution through the courts
• imposing financial penalties
• notice to place corrective advertising in a major newspaper that gives customers certain information about your business, such as fees not disclosed in previous advertisements
• freezing bank accounts
• referral of complaints to other authorities or bodies.