Customer protection Flashcards
Referral selling
involves telling the consumer that they could get a special deal if they purchase a product or service and then supplies the names of potential customers to the retailer
What is a contract?
A contract is a legally binding and enforceable agreement between two or more parties. A contract outlines the details of the agreement and the rights and responsibilities of each of the parties.
Features of a simple contract
Offer: the offerer (consumer) makes an offer to the offeree (seller) to purchase a good. When a business advertises products for sale, this is an invitation to treat (not an offer).
Acceptance: the offeree agrees to the proposal, either orally or in writing
Consideration: all parties must give up something of value. E.g the consumer gives up their money and the retailer gives up the goods.
ALL THREE OF THESE ELEMENTS NEED TO BE FULFILLED FOR THE CONTRACT TO BE LEGALLY BINDING.
Legal rights and responsibilities of consumers
Safe products - directions for proper use are provided and products are tested by the manufacturer to ensure product quality
Accurate product information and descriptions - e.g. ingredients are to be clearly labelled
Full disclosure of the terms of sale - full price always displayed
Consumer guarantees and warranties are honoured - refunds or exchanges are provided if the product is faulty.
Responsibilities of consumers
Pay the correct amount
Purchase goods and services from ethical and legal sources
Use the products in an environmentally friendly manner
Accept the risks when they purchase something - caveat emptor (let the buyer beware) - a seller is not required to tell you everything about the goods for sale.
What does “caveat emptor” mean?
let the buyer beware
Misleading methods used by retailers
Fine print - important conditions are written in a small-seized print (difficult to read).
Before and after advertisements - the before images are worsened and after images are enhanced to exaggerate the effectiveness of a product.
Tests and surveys - unsubstantiated claims, e.g ‘9 out of 10 people’
Country of origin - “Made in Australia” vs “Product of Australia” are two separate things.
Packaging - the size and shape of the packaging may give a misleading impression of the product/contents.
The Australian Consumer Law (ACL) operated under the Competition and Consumer Act 2010 (Cth), applies nationally and protects consumers against undesirable business practices. The ACL provides consumer guarantees (gives automatic legal rights) on certain goods and services. If something goes wrong a consumer can seek a repair, replacement or refund from the business.
The Australian Consumer Law (ACL) operated under the Competition and Consumer Act 2010 (Cth), applies nationally and protects consumers against undesirable business practices. The ACL provides consumer guarantees (gives automatic legal rights) on certain goods and services. If something goes wrong a consumer can seek a repair, replacement or refund from the business.
Consumers are guaranteed that the goods they buy:
Are of acceptable quality
Are fit for purpose
Match the description, sample or demonstration model
Comply with an express warranty (when a manufacturer or seller makes extra promises about a product’s quality or standard)
Are legally owned by the seller
Have spare parts reasonably available
Consumers are guaranteed that the services they buy:
Are fit for purpose
Are provided within a reasonable time
Are provided with reasonable skill and care
What is the role of NSW Fair Trading?
The NSW Fair Trading provides information and assistance to consumers, resolves complaints, ensures product safety standards, verifies correct weighing and pricing of products, and warns the community about unethical business practices.
What does the NSW Civil and Administrative Tribunal do?
The NSW Civil and Administrative Tribunal resolves disputes and makes decisions on a broad range of matters in the state of NSW.
What is the function of the Ombudsman?
The Ombudsman investigates and reports on complaints.
What does the Australian Securities and Investments Commission (ASIC) do?
The Australian Securities and Investments Commission (ASIC) protects consumers in areas of credit, investment, insurance, superannuation, and banking, and reduces fraud.
What is the role of the Australian Competition and Consumer Commission (ACCC)?
The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth), acts as a watchdog on the pricing of goods and services, and informs consumers of their rights.
