Need for National Approach to Consumer Protection
Discuss about the Consumer Protection for Trade Practices Act.
For many decades, it was felt that several benefits will be available if a national approach was adopted towards consumer protection. Indeed, these attempts to implement consistent consumer legislation were mainly successful in 1980s in the form of template legislation scheme that was based on Trade Practices Act, 1974. However, the advantages of this consistency could not be achieved for long as the current individual governments were all following their own improvements in the consumer laws which resulted in complexity, divergence and duplication. The result of this situation was that the consumers as well as the businesses were not comfortable in completely understanding their rights and obligations that have been provided by the consumer law (Miller, 2002). This resulted in increased costs, in terms of money, time and at the same time. There was a decrease in confidence. However these developments would be understood as the government had to face pressure to deal with particular concerns in routine life and generally the answer is to do something. But the consequences of taking this type of unilateral action in particular jurisdictions are not fully appreciated in all the cases, both for the consumers as well as for the businesses (Harris, 2016).
Regarding consumer rights it can be said that the rights are counterparts of responsibilities. Therefore the right is meaningful only to the extent that it results in creating a responsibility for some other person to do something. In each case the responsibility arises as a result of law and it is also imposed by the legal system. Likewise, the source of right and its corresponding responsibility can also be found in the contractual agreement or in some cases it may be present in the statute. Similarly may arise under the general law also. However in each case the right has to be imposed on the basis of these terms through the legal process. There are a wide range of interests of the consumers that may be recognized and protected by the legal system (Carter, 2006). These include the interest of the consumers in ensuring open and honest dealings had the businesses so that the consumers can make informed decisions. Another issue is to eliminate undue pressure or coercion as a result of which the will of the consumers may not be free, while making a decision. Similarly, the consumers should be protected from exploitation and different types of practices that are adopted by the business for the purpose of taking advantage of the weaker bargaining position of the consumers, particularly in case of the consumers who are vulnerable as a result of their advanced age, language deficiency or commercial un-sophistication etc..
Consumer Rights and Responsibilities
The marketing process is undergoing a change, and becoming more sophisticated. An obvious sign of the presence of such a change is the emergence of Internet due to which new risks have also been created for the consumers. For example, the consumers may purchase a product through the Internet that they have not sighted or tested. Similarly in this case, there is a risk of dealing with a person who may not be located within their jurisdiction. However, the evolution of market is appointing his process.
It was found by the Productivity Commission that maybe there is an effective regime of consumer legislation present in Australia. However at the same time, the mission also discovered that these legislations, as a result of duplication, complexity and inconsistency may also result in restricting the improvements that can be made for the purpose of consumer protection. It was also discovered that these factors resulted in increased costs for the consumers as they had to pay for the inefficiencies that are imposed on the businesses by these factors. Similarly, there was also a decline in consumer confidence while making choices, claiming their rights or when things go wrong seeking remedies.
As a result of the complexity that existed in the consumer legislations, the congregation had to face a negative effect and it was also detrimental for efficiency and innovation. The negative effect of the complexity in consumer legislation can be seen from the fact that 655 $.13 billion were spent by the Australian consumers in the presence of the legal framework that was not capable of supporting such large consumption (Lindsay, 2010).
It is the most efficient way for the consumers to get what they want through the market and not through the government. However in this contest, the bargaining power of businesses is more than the consumers. The result of this position is that it is possible for businesses and businesses do abuse their bargaining power to achieve a benefit by depriving the consumers of their money. As a result of this situation, the government had to introduce legislation for the purpose of regulating the behavior of the businesses and to ensure that the market economy is functioning efficiently. The purpose of the labor protection legislation is to provide protection to the consumers against misleading or deceptive representations, unfair contracts, unconscientious conduct of businesses or providing unsafe goods or services to the consumers. Therefore in order to avoid protection to the consumers, various legal and non-legal resources have been adopted by the government (Paterson, Robertson and Duke, 2016).
Evolution of Market and Risks for Consumers
The statutory protections that have been provided to consumers by the government, for example just a consumer law and the National Credit Code help in regulating the businesses and provide protection to the consumers. Such legislations are also present at the state level, like the Contracts Review Act, 1980 and the Fair Trading Act, 1987. A particular provision of the ACL that needs to be mentioned in this regard is section 29. According to this provision, a business cannot be a false claim related to the products or services offered by it to the consumers. For example in ACCC v . Harvey Norman (2012), the court discovered that Harvey Norman stores were liable as they had made false representation related with the rights provided to the consumers by consumer guarantees. The court discovered that the sales employees of the stores have made these representations, who really to the consumers. This matter was recognized by the court and as a result, a penalty was imposed on the stores and they had to pay a fine and at the same time, the court also ordered them to display in-store signs in which corrective notices were displayed. Similarly, they were also restricted by the court to implement consumer legislation compliance program (Carter, 2015).
There are various government statutory agencies that also play a role in enforcing the provisions of the ACL. Similarly, these agencies also have been attracting the attention of the businesses towards the consequences of the failure to comply with the consumer law and similarly they also help in dealing with such problems. In this regard, an important role is played by the statutory body known as the Australian Competition and Consumer Commission. The purpose of this commission is to ensure that the markets work efficiently for the benefit of the consumers.
Likewise, the ACCC also plays a role in ensuring that the market remains safe and fair for the consumers. For example, the attention of the Commission was drawn towards the fact that the major business was making misleading claims. It was claimed by Coles in its advertisement that the bread it was selling was “made today, sold today”. Similarly, it was also claimed that the bread was freshly baked in store. However, it was discovered that the fact was that the bread was not even being baked in Australia. In reality the bread was partially baked in months in advance in factories located overseas. The effect was that the guilty verdict was accepted by Coles. The company also informed that it had already started using new packaging. Such cases reveal the effectiveness of the ACCC in making sure that the provisions of this year are followed by the businesses, although it is felt by many that still the penalties imposed in this regard are not harsh enough. The reason is that in case of large businesses; a penalty of $1.1 million is not too much, keeping in view the profit made by such businesses.
Challenges Faced by Existing Consumer Legislations
At the same time, non-statutory protections are also available to support the ACL in achieving its objective of consumer protection. These protections can also play an equally effective role as played by the statutory protections. One such non-statutory protection is present in the form of media. As widely knowledge, media provides a very powerful tool. It can be devastating for the profitability of the business. Therefore in order to avoid the negative spotlight by the media, generally the businesses try to quickly “straighten out” their actions if it is discovered that they have breached a particular provision of the ACL. Such a situation can help the consumers because they ensure that the business complies with the law.
In the same way, in this context, another statutory measure can also be taken to protect the consumers. This is available in the form of External Dispute Resolution Schemes (EDR). For example, the Financial Ombudsman Service can be mentioned as an example of EDR. It also helps in providing protection to the consumers in case of the matters dealing with credit loans. In this way FOS provides a faster and cheaper way to arrive at a solution in case a dispute arises between the consumer and business. At the same time, the solutions provided by the FOS are unbiased and they are both in the river of consumers and the businesses. Instead of the need for going to the code is the business, the consumers can approach FOS, and it is possible to arrive at a solution quickly and also cost-effectively. Moreover, the decision given by the FOS is final. Regardless of the party that has been benefited more by it. In this way, this non-statutory body can play an important role in providing protection to the consumers from the conduct of the businesses.
In this way there are both statically as well as non-statutory measures that have been taken for the purpose of providing protection to the consumers and market economy. The statutory provisions like ACL create particular laws, and they also regulate the businesses. On the other hand, the non-statutory bodies like media and EDR schemes also play an important role in enforcing the laws that have been made by the governments at Commonwealth and State and Territory level. Jointly, all these measures help in ensuring the achievement of the objective of consumer law that is to protect the consumers against unconscionable conduct, misleading representations, unfair contracts and the supply of unsafe goods or services to the consumers.
Very strict liabilities have been imposed on the businesses in case of a contract of sale. Therefore the business can also be held liable even in the case, where the business is not aware of the presence of the defect in the products or services. Similarly, the law does not allow the businesses to exclude the statutory guarantees that have been provided by the ACL. Moreover, if it is discovered in a case that the seller has breached its obligations under the law, in such a case the law allows the consumer to claim damages for the loss suffered by him or her. In this regard, various remedies are available to the consumers and the appropriate remedy in a particular case depends on the circumstances like the right to reject the goods, termination of contracts or reputation etc. Generally, it is considered that the rejection of goods is the most obvious remedy that has been provided to the consumers by the law.
References
Carter, J.W. 2006, Carter’s Guide to Australian Contract Law LexisNexis Butterworths
Carter, J.W., 2015, Quick Reference Cards: Contract Law I & II, LexisNexis Butterworths, 2nd edn.
Harris, P., 2016, An Introductions to Law, Cambridge University Press, 8th ed.
Lindsay, G., 2010, Contract: Sixth Edition, Nutshell series (Lawbook Co. 6th ed.
Miller, J., 2002 Getting into law, Butterworths Australia
Paterson, J., Robertson, A., Duke, A., 2016, Principles of Contract Law ( Lawbook Co. 5th ed.
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