Transcript Document

Consumer law and compliance: the
State Regulator’s view
Dr Elizabeth Lanyon
General Manager
Corporate Programs and Projects
Overview
• Balancing the rights of consumers and
business: making markets work
• Update on consumer protection legislation
• Emerging issues in the online environment
About Consumer
Affairs Victoria
• Victoria’s main consumer protection agency
• “informed and responsible consumers and traders”
– Responsibility for over 40 Acts (review, amendment,
regs etc) including business licensing
– City shop front and 7 regional offices
– Community educators
– Call centre and website
– Conciliation and mediation
– Compliance and enforcement
The regulatory context:
making markets work
• Productivity Commission National Consumer
Policy Review: report due end 2007
• COAG “hotspot reviews”: trade measurement,
product safety, personal property securities
reform, business names
• Victoria: Victorian Competition and Efficiency
Commission, Reducing the Regulatory Burden
initiative
• 2006 Department of Justice Better Business
Better Business
Regulation
• An initiative covering the whole of DoJ not just CAV
• Aim to enhance the practices of regulators
• A framework for evaluating regulator practices has been
developed and is starting to be pilot tested
• The Reducing the Regulatory Burden initiative has added
significant momentum to efforts to achieve regulatory
reform
• Funding has been made available under the RRB initiative
to continue and extend the BBR project and to undertake a
significant review of licensing scheme administrative
arrangements
• Performance measurement
General Themes
• Legislation cannot be waived
• Rules need to be exactly complied with
– Proof read forms and warnings
– Check scripts and policies
– Educate sales force and agents
• Timing can be critical (eg cooling off
periods, do not call times)
• Need effective complaint handling
Non complaince
costs
• Consumers can seek redress on one
off basis
• From co perspective larger issue is
criminal sanction or publicity:$120,000
co $60,000 individuals
• Also undertakings re compliance
program
• Remedies can apply to directors
Fair Trading Act 1999
(Vic)
• The “triangle”
– Unconscionable conduct ss7,8,8A, 8B
– Misleading and deceptive conduct
9,10,11,12
– Mirror TPA
– Unfair contract terms Part 2B(Vic only)
Recent legislative
changes
• Amendments to Fair Trading Act
• Increased powers such as
substantiation notices, show cause
notices
• Increased powers of inspectors to
monitor compliance
• Cease trading injunctions
• Corrective ads/adverse publicity orders
How CAV handles
complaints
• Published policies
• Proactive trader engagement
• Individual trader contact
• “Hearing both sides of the story”
• Proportionate response
Assessment
of
Complaints
Advice
Seek additional
Information
Info not adequate
to assess
Advise customer
or refer
Not CAV jurisdiction
Info
Provide
Information and
Resource
Provide advice on
next steps
Need
Additional
Assistance?
Assistance
Advise customer
to approach trader
Refer to FLE
Refer to Financial
Counsellor or Advocate
Trader Not Approached
Low
Potential
Breach
Breach or unfair
practice?
Impact?
Refer to C&E
Advise customer
Refer to Region
High
Unlikely to be settled
Trader
History
Consumer and
Trader in same
region
Refer to Dispute
Resolution
How to engage with
the regulator
• Acknowledgement
• Allocate to appropriate level of
seniority
• Respond as clearly and as cooperatively as possible
• Adhere to timelines or explain why not
• Consider legal advice
• Consider systemic issues
Recent FTA cases
• Houghton v Arms
– Director of Consumer Affairs Victoria, amicus curaie, appeal
before the High Court of Australia
– s. 9 FTA, could company employees could be liable for their
misleading and deceptive conduct, in trade or commerce,
engaged in within the scope of their normal duties as
employees.
– held employees were personally liable
• VIP Executive Car Rentals
– consumers in Australia and overseas (including South Korea,
India, UK and Singapore)
– Representations: security deposits would not be debited to
consumers’ credit cards unless the cars were damaged.
However, VIP debited these amounts immediately and failed
to refund them; amounts were $3000 -$5000.
– Magistrate’s Court - declarations that VIP had engaged in
conduct that was misleading or deceptive, or was likely to
mislead or deceive. Injunctions
Emerging issues
online
• Plus ca change….
– ACCC v Google: misleading and
deceptive conduct in sponsored links
– “unlimited” usage
– eBay v BigDay Out [2006] FCA 1768
ISP /online auction
sites
• State law applies to online environment as
well as C/w
• CAV has a role in dispute
resolution/complaints (not just TIO)
• Statutory warranties under FTA
• Unfair contract terms
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–
–
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Liability for content providers
Liability generally
Unilateral variation
Hidden or inconsistent terms
More information
• CAV website information for traders
and consumer affairs professionals
• Fact sheets, policies, updates
• www.consumer.vic.gov.au