Contemporary Issues Concerning Consumers Flashcards
What is the issue of credit?
According to an RBA study, in 2016, card payments overtook cash for the first time (52% of all payments)
Many consumers spend beyond their income, and, as a consequence, can risk exploitation by unscrupulous lenders
Credit card companies have been criticised by the RBA & CHOICE for the exorbitantly high rates they are charging their customers - 2018 credit card interest totalled $33 billion despite mortgage & general interest rates being relatively low
What have been the legal responses to issues surrounding credit?
The Council of Australian Governments in 2008 determined there should be a transfer of consumer credit regulation powers to the Federal government
This resulted in the National Consumer Credit Protection At 2009 (Cth), with the National Credit Code - a single uniform law for the regulation of credit across all jurisdictions in Australia
Monitored by ASIC, the NCC requires credit information be provided in a clear & understandable format, and that credit providers may not engage customers who may struggle to repay
What have been non-legal responses to the issue of credit?
NSW Fair Trading provides free advice regarding the National Credit Code
The Australian Financial Complaints Authority provides free mediation specifically for resolving credit disputes between consumers and member financial institutions
The Banking Royal Commission of December 2017 investigated misconduct in the banking, superannuation and financial services industry
On 1 February 2019, the Commission released 76 recommendations to overhaul the banking sector and credit arrangements
The media was critical that some of the findings weren’t tough enough and charged the regulators with the responsibility for taking action to stop this behaviour
What is the issue of product certification?
Consumer goods must pass performance and quality assurance tests according to industry codes or national standards
If a product gains accreditation, it has complied with a set of regulations governing quality and minimum performance standards
In a globalised world, it is difficult to track the certification of all goods
What have been the legal responses to product certification?
The ACCC enforces mandatory product safety and information standards and bans unsafe goods under the
Safety standards contain safety, labelling and design requirements and are established when there is a clear risk to consumers
Information standards refer to information which must be given to consumers when they purchase a product, such as labelling of contents and risk for cosmetics
An example is the Country of Origin Food Labelling Information Standard 2016, introduced after a 2015 incident of Australians contracting hepatitis A after eating frozen berries sourced from China
Part 3.3 of the ACL contains provisions specifically addressing unsafe products through mandatory safety & information standards, banning unsafe goods, compulsory product recalls and warning notices to the public
The ACCC enforces this, and has the power to conduct random national surveys of retail outlets to look for non-complying products
It can conduct recalls, obtain court-enforceable undertakings, seek proof of compliance from suppliers and arrange for goods to be tested (TAKATA)
What have been the non-legal responses to product certification?
Individuals may take action through one of the independent consumer groups which advocate on behalf of consumers, lobby parliament to influence legislation , and act as consumer ‘watchdogs’
The media can be a powerful tool for publicising consumer safety issues, with television shows such as The Checkout
What is the issue of marketing innovations?
Over time, the marketing process has become increasingly more sophisticated, especially with the advent of e-commerce
Companies can now market to the world
Combined with Australian consumers’ increasing reliance on credit cards and online purchasing, consumer protection becomes problematic
In 2018, the ACCC’s scamwatch reported having received 24,291 phishing scam reports with total losses of $944,370
What have been the legal responses to marketing innovations?
The Spam Act 2003 (Cth) made it a civil offence to use address-harvesting software to build distribution lists of recipients
The Act also gives powers to the Australian Communications and Media Authority to search and seize equipment and impose penalties of $1.7 million per day for breaches to the Act
In 2006, ACMA’s first case was ACMA v Clarity1 in which the company were ordered to pay a pecuniary penalty of $4.5 million for breaches of the Spam Act
What have been the non-legal responses to marketing innovations?
CHOICE - publishes a magazine for consumers and reports on variety of issues including deceptive market practices
Scamwatch - a website operated by the ACCC providing information to consumers and small business on identifying and avoiding scams
According to a 2015 ACCC report, romance scams were the biggest financial fraud in 2014, costing Australians almost $82 million
What are issues that have arisen with relation to technology?
Technology has become increasingly integrated in everyday life and in the purchasing of goods/services
The trend towards ‘remote purchasing’ can compromise things such as product quality, provision of advice and ‘after-sales’ service
There is the need to ensure that the identity data gathered about consumers via their online transactions is protected & privacy is maintained
What are the legal responses to issues of technology?
The ACCC has the power to enforce the prohibitions contained within the Competition and Consumer Act 2010 (Cth)
assets of a foreign online marketer can be frozen if the Australian legal system has information about their location (not always available)
arrest warrants can be issued in Australia, and Australia can use extradition treaties with certain countries
The Do Not Call Register Act 2006 (Cth) is regulated by ACMA and offers consumers a database to opt out of telemarketing calls
What are the non-legal responses to issues of technology?
Australian Direct Marketing Association - an industry body for direct marketing companies strongly committed to self-regulation
with other industry/consumer representatives, it formulated the eMarketing code of practice (registered in 2005) to supplement the Spam Act 2003 (Cth)
Internet Industry Association - a similar organisation for internet providers, it has developed several codes, such as the Spam Code of Practice 2006
