New Consumer Law in Australia - Essay Example

The Running head: Why the need for the new Australian Consumer Law? Name of student: Admission number: Unit code: Course name: Name of lecturer: Date done: Date submitted: Number of words: 5,462 words. Outline Introduction The Australian consumer law can be better and more adequate A consumer centred protection Effective responses to consumer issues The objectives The current consumer policy frame work The generic consumer protection The law enforcement frame work The safety with the product law Basis for Australian consumer law The trade practises Act Unconscionable act Existing enforcement Implication for the consumer Law Implication for the national financial laws Areas of concern on the Consumer law reforms Reforms for the consumer law enforcement powers Redress for the consumers Conclusion Introduction There is a need for the new consumer law in Australia. The consumer will unify the consumer law, replacing a wide range of the existing national and state consumer laws and hence will be long under one universal classification of the consumer law. It will be an indication that all the consumers and businesses will possess the same rights and with equal responsibilities across the whole Australian country. It will thus be able to generate a clear understanding for everybody within the state. It is the universal legislation for the consumer protection for the common wealth of Australia and each of the Australia’s territories. It is scheduled for the competition and consumer Act of 2010 that has it incorporated into the law of each territory by the reference to every state as separate fair trading acts. It is an improvement of the trade practises Act of the 1974 which has been advanced to accommodate new provisions of the law. The unified consumer protection law will provide equal protection and to promote consistency in the jurisdictions.1 This will also enable the government to make amendments that will be incorporated as the law of the state and the territories without the debate of the parliament of territory. It will provide leadership in the unfair regulatory terms in consumer practise in contracts. The new enforcements powers will guarantee proportionate responses to the consumer law breaches and new measures as options for the consumers. Moreover, it establishes a national regulatory centred guideline for the product safety. A new agreement will be entered between the Australian government and its territories to augment and modify to promote best practice in the law. A sharing and advanced enforcement cooperation and information sharing will also be arranged. The Australian consumer law can be better and more adequate. While the consumer law has its own strength and weaknesses, part of the current consumer law require an overhaul.2 The current guide lines operating through the Trade Provisions Act (TPA) and the Fair Trade Acts (FTA) have a wide platform through which consumer’s protection for most of the product had been achieved. Australia needs a more prescribed regulatory regime that will be able to overcome the current inconsistencies while filling the gaps and avoiding the duplication of the policies generated in consumer protection. The overhaul of this will mark a significant transition in the history of Australia marked by consistency in major areas. A product and service markets for the nation needs a national regulation. There is diversification in the business markets and the consumer products and services are increasingly becoming a national characteristic. For instance, statistics indicate that the number of businesses operating nationally went up by around 47% increase to 53% since 1998 but skyrocketed to 70% in 2003. This includes both the number of firms that are in operation in all the states and the territories. Innovativeness and creativity has been the key element in these transitions. In supply management, it has even shown greater benefits by adopting the use of information technology and good road infrastructure. Business has grown tremendously across Australia supplying a range of goods and services. By the use of the internet, consumer buying has went up across jurisdiction in online ordering and purchasing which is estimated at 50%. It is therefore imperative to say that consumer protection will be so efficient to the terms that even a consumer purchasing goods from the same supplier will still have the protection. When economies talk in terms of the stimulus growth, it has to understand that consumer protection is relevant to the seamless national economic growth.3 A consumer centred protection Australians consumers have been subjected to various inconsistent practices on the rights and responsibilities which are subject to the variation in the legislation, enforcement intensity, policy approaches and practices and redress options among all the Australians jurisdictions. There is a wide market for the products across borders and transactions by the e-commerce have raised concerns in relation to the divergent views held by the different nationals.4 Multiple regulatory bodies have raised unfair compliance costs which are increased by the need for the supplier. Even where there has not been no actual variations with the regulation, supplier have found themselves incurring the extra legal cost to ascertain their obligations on the cross jurisdiction. These prices are transferred to consumer in the form of commissions to the consumers in the form of higher prices. Effective responses to consumer issues Markets have always been dynamic to the nature that has been reputed to the increased reliance on the technology and a very first pace of innovativeness. This is a big challenge even to the policies that happen to lose meaning with time. ‘Policies application should always be current to technological advancement’.5 Duplication of the policies on the other hand will work to the demerit of business development which also does not justify the need for complexity. Australian government will be required to streamline all the policies making procedures to avoid any particular impediment for effective response to issues in the past. On the political scenario, that might seem little but politics at the end of the day always seem to carry the day and might have a very big influence on the decision. The objectives The objective of the consumer has to be streamlined to ensure that it has to be supported by six operational objectives for the consumer policy to be equally representative.6 As such, it has to meet the satisfaction of the consumer and they should be well informed for them to benefit from and stimulate the effective and healthy competition. The goods and the services offered should be fit and safe as to the baseline quality standard for which they were sold. More so, it should be able to reduce and avoid all aspect of the unfair practices. In addition to meeting the needs of the consumer that most at times are vulnerable or are exposed to most of the risks which are to their disadvantage. 7 The services need not only to provide accessibility but also timely solutions where consumer’s detriment has occurred. And finally enable equitability in risk based enforcement. Only this will be able to provide the necessary guidance but with the broader perspective of the Australian Consumer Law development. This will be able to make it clear for the understanding of the legislation made and its intents which are vital in the judicial comprehension and final interpretation. Fair trading is the major target for the equal competition and the empowering of the consumers. These are the existing objectives that have already been advanced with modification reflecting the concerns of the people of Australia. The current consumer policy frame work The generic consumer protection This are policies that are designed to protect the consumer with regard s to highly harmful and exploitative conduct by the suppliers when undertaking transactions in the any issue relating to the economy. They act as some ethical guidelines which are there to regulate the conduct of behaviour when handling transaction with the consumers.8 They also position the consumers with the power to take a legal action in respect to harm that a consumer is likely to suffer under certain circumstances. Generic consumers are in 12 different laws; the TPA (Trade Practices Act) and the ASIC (Australian consumer law act).9 They apply nationally and in more than 9 territories while the territories FTAs (Fair Trading Act). These laws are consistent in a very broad sense with very little differences in the law. However, the more significant differences seem to emerge that seem to give more meaning to the generic protection of the consumers that appear commonly with the TPA and have addition. This includes more categories of false and misleading representation prohibited in the state and territories guidelines of the FTAs. The ACT laws have also incorporated the regulation of credit card increases. The common Victoria’s provisions of the legislations that handles unfair contract terms. The telemarketing rules that are similar or deferring derived from the concerns of the NSW, Victoria and SA’s. It has been observed that already there is a gradual and very substantial shift away from the largely consistent generic consumer laws which is an indication the current system is already very expensive for businesses and the consumers and which has only few benefits that seem to counterbalance. There are many differences in the consumer laws which are set out and have serious implications for the consistency of these laws.10 First, the definition of the term consumer makes a significant difference between the powers vested in the consumer. This is done for the protection of the consumer. This definition classify the two categories on consumer classification on whether the goods or the services are needed for personal and domestic or for the business uses and the value of the goods or services that are purchased. Objects of the TPA and FTAs have also indicated significant differences between the objectives of the various consumer laws. The objects are very important in the decisive interpretation o f the legislation of the law. They have the influence of informing and reflecting on the different approaches over policy issues development and enforcement. Only the TPA and the FTAs allow the warranties to the consumers and only those who have not had a previous contractual relationship with the supplier. Concern over the industry specific consumer regulation in the energy, food, credit, tobacco and other industrial linked business lines was also raised. They are overly just prescriptive and very unnecessary more especially with the existence of the generic regulations. The added compliance and complexities on the ongoing trade in industry specific regulations need to be changed.11 The occupational licensing by the taste and the territories are handled in either one or two jurisdictions, it has raised eye brows on the need and the necessity for the licensing with their economic impact and thus the need for Australia to overhaul the whole generic regulatory mechanisms. Product standards have questionable mandatory measures that are applied for the services.12 Enforcement remedies for the consumer laws are divided as a territorial affair and the state trading offices and the national regulators. The state focus on the consumer issues within their jurisdiction while the national regulators deals with wide issues within the inter-state of the national dimension. Consumer regulators are also indicating cooperation with regards to the enforcement agenda. Increase in the economy with the associated increase in the business, enforcement and complexities which require proper coordination and cooperation between policy makers.13 The diversity of the consumer regulation demands a wide range of policy regulation approaches that can be taken in enforcing the consumer laws. Consideration has to be made that limits the national regulatory powers to be able to manage the misconduct of the unincorporated businesses14. It looks into the costs and the needs of the nature of the business. The objectives and the culture of the organization define the responsibilities for enforcing. The law enforcement frame work Consumer enforcement is a shared responsibility between the state, national and the territory regulators. For instance the ACCC has been enforcing the generic consumer protection involving the TPA in ala the Australian areas of powers, it handles the breach of the law against the cooperation’s and individuals as justified by the constitution. Market integrity and the financial protection with reference to the financial system as well as the investor protection are handled by the ASIC that monitors all the forms of conducts.15 The TPA act does not include the financial services in their scope of the consumer’s protection. All this regulatory departments that administer and enforce the duties vary from the state to state which lie in the office of the Fair trading, consumer affairs and the department of commerce.16 These regulators will take action for breach of law by either an individual or an entity. The safety with the product law Australia will need a single streamlined safety law and the enforcement system. It should therefore make strategies for the implementation of reforms. The law will integrate the product safety regulations into the provisions. Basis for Australian consumer law The best guideline will be to base the on the generic provision of the TPA. This will either require be augmenting or modifying especially in those areas that seem to bring core controversies. However, this does not expose the inadequacy in the practice of this generic law over the state and territorial consumer protection17. It therefore implies that proper review of the effectiveness and the related provisions with the consumer protection hence the current issues that may arise from the provision of the TPA are quite very relevant to this policy decision making. The trade practises Act Consumers have been defined as buyer and individuals who can be an individual or cooperation and the price also determined the services to be offered.18 The commodities on the other hand are not supposed to be acquired for the purpose of the supply to another individual after purchase and this is irrespective of their prices. They are also not to be modified in the course of trade or commerce.19 Hence, even with the consumer protection provisions, all goods used by the businesses and that do not satisfy the guidelines still fall under the TPA. We can therefore conclude that the consumers as defined by the existing services are only for the purposes of the protections as applicable by the TPA especially in some business courses. This is notable especially as regards the chapter 52, 53 of the Trade Protection Act. Unconscionable act The law prohibits unconscionable traits and behaviour for which it later own provides the solutions that are available within the unwritten law. It especially provides guidelines in relation to the supply of goods and services to the consumer. This setting gives the bench mark for the ruling in the court set up taking into account the unconsionability of the conduct. This covers a wide aspect of the business transactions and also sets out the issues that the court can put into consideration before ruling some of the cases.20 The consumer protective provisions also have measures for the misleading and the deceptive conduct. Any malicious intention of deceiving for gain is highly prohibited. 21 This will come in the transaction that involves business deals and the court will always find out a way of looking for such like intention. As such, the right to demand and be provided with the right information is at big play in conjunctions with other remedies as outlined in the generic consumer law. Subjective prohibition of the complemented range of other judicial provisions that may interfere with amore defined legislation by the virtue of false hood and misguided representation as is well spelled out in the section 53, unconscionable conduct as well as the referral selling and the pyramid selling. All this are subject to civil remedies as well as criminal sanctions. This supply of misleading information is highly prohibited I all business relations whether is the goods or services being offered which is not limited to any particular circumstance.22 Other unfair practices include bait advertising when it is widely understood that there are no goods that can be supplied. Referral selling which involves making promises that can be gained on referral. Some other companies conduct pyramid selling, these acts prohibits the selling and the commissions that are not economically sustainable.23 Some other cases are not by all means detrimental to the consumers. Other consumer protections include legislative regulation targeting the specific forms of the consumer protections. This will have some or all matters pertaining product safety, implied warranty, importers and manufacturers’ liability. Qualities of a good consumer protection policy should be have specific form of the consumer protection with an additional administrative process to facilitate them the whole process, this for instance may mean that the intent of the regulation is to remove the injury or to potentially reduce injury and any related issues that can be regulated as by the compliance and enforcement. Existing enforcement There are a range of tools available for investigations for the breaches of the law that is against the consumer protection provisions. These provisions have also given authority for the TPA to enter and search the premises and to seize the vital documents with the consent or a warrant that has been issued with the magistrate.24 Administrative remedies for the action of the consumer regulations will take place in a normal and formal legal proceeding. Courts are also part of the regulatory system. This undertaking involves the person doing the business. Or businesses agreeing of their conducts and that will not be engaging in the alleged conduct in any nearby future. The community can be salvaged from this practice by formalising the undertakings which will be able to handle a number of issues such as the corrective advertising, providing care and solutions for the harmed individuals, enabling the starting of the compliance programs and any other matter that will impact on the community services program. Any breach of the following undertakings is enforceable in the court of law and when it can be breached, it may seek authority to undertake other remedies as the court may deem it fit. Civil remedies on the other hand have their own position in the handling of consumer issues for the protections of the provisions. It has the consequence of exposing the wrong doer and making a civil liability or the civil remedies can also be justified for the private claimants. The TPA has allowed the court to make both the interlocutory and permanent injunctions. This has the dire consequence of restraining a person or restricting an individual from participating in certain conduct or other rules may apply in breach from the engagement in other areas of concern as will be deemed relevant by the courts. Litigants may seek compensation in the form of the monetary damages which may arise with regard to the breach of the Act.25 Damages can also be sought for individuals by the ACCC (Australian Competition and Consumer Commission). The ability to impose non-punitive orders can also be instituted by the ACCC which fall in all categories especially the community service orders, probation orders and even the corrective advertising orders.26 The goal of this fact finding is that the relation has to be provided that are subjective to the enforcement proceedings. Criminal sanctions are well outlined for each of the breaches outlined. But the prosecution are only meant for the most serious breaches that many include such as frequent flouting of the law. Implication for the consumer Law The principle regulation targets competition and consumer related issues. This has a supporting effect to the idea that consumer and the competition have very great role in the reinforcement for the effectiveness and fair markets for the benefits of the consumer.27 The Australian government will therefore need to enact the Australian consumer law as part of the TPA. As such; TPA will be a national market regulatory law. This conspicuous reform agenda will create a very serious implication for the form and the content of the TPA. As such, it implementation will oversee a number of changes associated with the consumer protection. First, it inclusion as a schedule for the TPA will have a base I the existing guidelines in the consumer protection. In addition, the agreed amendment will reflect the national consensus for the Australian consumer Law and finally its inclusion in the TPA will provide an administrative guideline for the common application of the law scheme which will be a very big effect on the Australian Consumer Law. Other than that, it will no longer bear the name of the TPA, it will have a universal outlook as a competition and consumer Act which will be denoted by the symbol (CCA) so that the functions adopt a more clear, complementary and mutual reinforcing nature of the consumer and competition policy.28 This will signify the core functions of the law which will be to clear competition and protect the consumers. Implication for the national financial laws The most important aspect of this law is that it should be able to apply to all the sector s of the economy. However, constitutional issue scan not be left out as the financial legislative frame work needs to have a distinct look and guideline due to the different powers as exercised by the commonwealth to jurisdice this areas under the Australian constitution. This denotes that special policies need to be drawn for the stringent provision of consistency between the consumer law Provision and the consumer / investor protections and the provision in the credit and financial services and the most essential aspect ids that it should be practical. This consumer is also a very important aspect for the Australian government at this time that two reforms are also needed to operate in tandem especially that involving the financial services law. This already has the proposition in its green paper. 29 It is therefore vital to state that this will necessitate the review of the consumer protection provisions that apply to this line of application. Already that need has already been identified and this is just a waiting the establishment of the uniform national laws. Moreover, this will have a far reaching implication on the states, territories that are in existence. There will be consistency in the states and the territories in terms of the FTAs which will be applicable in all the states and the territories. Areas of concern on the Consumer law reforms An unfair contract term has led to the current very insignificant lack of balance in the parties’ rights and obligations that arise under a contract and may not serve as a ‘legitimate reason for the business interest of the supplier’s protection’. For instance: In Victoria and the UK, there is a reserved right for varying the contract at any time with any possible justification or removing the liability or the interruption of the supply. This has been widely used as with the standard form contract which has room to do business with a large number of people at very affordable cost and of which the savings are passed over to the consumers at low prices. These unfair terms are found; in the standard contracts which suggest to the consumer to take it or leave it form of offer. The dynamic in these standards could lead to the emergence of other regulatory regimes that is likely to adopt a consequent cost implication for both the business which will eventually impact on the consumers. The baseline argument for the unfair standard contract term is that it may provide unfair terms regulation which may be at the expense of the consumer though it may be in the short term. This may also weaken the potential of businesses to handle small number of consumers who may be acting in bad faith which will eventually reduce the likeliness of having fair, cheap and efficiently bulky consumers. Finally renegotiating of terms might end up being very costly than even the unilateral variation. Some of the matters arising with the contract law include the following that permits suppliers to unilaterally vary the agreement terms of the contract being entered into.30 There are also several clauses which work against the consumer making cancellation of the contract which is exploitative and does not carry the right to taking responsibilities. Other discriminating clauses allow payment of fees that are non- refundable even when the services have not been offered.31 Exclusion of the liability for harm that could emanate from the supplier or its registered agents has a very big gap in terms of its applicability. The contract also to a large extent seems to only penalise the consumer while on the other hand seem to limit the rights for legal considerations and at the same time impose the consumer on the evidential burden.32 Termination of contract by the consumers has also been treated as a breach of the contract and as such, they have been subjected to extra additional payments as interest or indemnity legal costs which are not comparable with the suppliers reasonable cost. This form of contract will have to cover utility services, banking and the financial services, soft ware and the user’s licences, e- commerce and the current m-commerce, online auctions and so on. It will be the best thing therefore to consider the amount that will be the reason in the dispute that is either owed by the consumer or the amount alleged to be owed by the consumer. The genuine adequacy of the performance of the contract will be able to bring about a reasonable dispute resolution process. Reforms for the consumer law enforcement powers At the national level the primary responsibility for the enforcement and implementation of the consumer laws will be a full responsibility of the ASIC. The range of penalties, enforcement and remedies which already in existence. They will only need appropriate modification that will be reflective of the powers vested in the territories and the state enforcement agencies. This will be able to include several provisions that should cover the civil pecuniary penalties and the disqualification orders by the court of law. Substantiation orders can also be provided, the availability to redress for non partisan proceeding public warning and the infringement awareness notices that are compliance to the commonwealth and the state and the territorial laws and policies.33 The new enforcement powers for consumer regulators fall into several types: the substantiation notices include powers for the consumer to issue substantiation notices. This requires that the supplier provide the consumer regulator a good justification regarding the supply of goods and services, this will provide the regulators an extra tool to be able to handle the increasing complexity in the trade and commerce as regards representations. Failure for the compliance to the substantiation notice would be of very serious consequence for the recipient.34 This may go further to incorporate the enforcement as may be deemed relevant depending on the conduct. Public warning powers which is translated for the naming and shaming power.35 This provides the relevant information to the consumers that they are likely to suffer short term of harmful conducts. This usually affect the itinerant traders, financial, investment and property advisors and who operate between zones. Developing a national public warning will be an indication of the consistent powers existing across all levels of power which are subject to the similarity in the governing power. The circumstances under which this has been used are the current concern for publicity. However, the ongoing impacts are the subject of the warnings as well. This calls for the appropriateness in the exercise of this powers which will be vested in the new constitution especially regarding the defamation. This on the other hand calls for the statutory immunity which ought to be as a matter of principle in relation to the potentially defamation. The current jurisdiction does not have the immunity they deserve to command the legislative authority they deserve. Infringement notices have also to be included in relation to the breaches of consumer protection policies. This will provide the flexibility to allow the existing state and territorial infringement regarding the administration of the court processes failure. Redress for the consumers The Australia consumer policy is to provide a range of solutions that relate to the policy that work to the disadvantage of the consumers.36 The consumers will also power that will guarantee the consumer regulator from seeking orders from the court in order to seek the redress for the persons who do not qualify to be party to particular actions.37 Redress will improve the ability of the courts to handling issues that affect a large number of parties especially in contravention of the consumer law, it is thus valuable to offer redress to the non parties when a large number of consumers also are exposed to almost similar, identifiable disadvantages. This will have to call for a high level of expertise in order to handle all this issues at the same time and provide a lasting solution for the redress as concerns the consumer protection. Product regulatory safety measures will need to be effectively applied in corporation especially with the respect of the goods traded within and across the state and the territorial borders. This will be able to stream line the service delivery and ensure that quality is within the regulatory system. Every state has its own product safety but the differences in the policies’ are thus a big barrier, this unification into a major block that will also accommodate issues as of the commonwealth laws.38 Hence there form that is required is subject to the unanimous mandatory legislation by the Australian government. All this reforms in the Australian law need s to be based on best practice, part of this will be able to address the specific problems that are facing the consumers which will target the consumer issues and or including the non regulatory issues and approaches. The analysis will need to be quantified and analysed from the basis of change.39 This will determine whether the law will be appropriate for inclusion in the consumer law for protection on an economical baseline covering a wide aspect. Conclusion A comprehensive consumer law is what is expected for the Australian government which has divisions of states, territories and even the nationals. This law provide a good jurisdiction back ground that will reflect the unity of all the Australian governments in the issues that pertains the consumer protection. As much as the consumer law has had its good part of the history, there have been quite some goods gaps that raise concerns over what needs to be done. The outright policy is to protect the consumer and to avoid discrimination of the supplier. This calls for equitability in consideration of all factors that underlie a law formulation framework which is pertinent in this scenario. Australia needs a comprehensive consumer law policy and as has already been suggested, it will be better to be referred to as the consumer protection and competition law. The main aspect is consumer protection because they most of the time become the subject of detriment due to their position in the business hierarchy. It is therefore my opinion that a new consumer law be drafted and should be architecture to meet the demands of all the aspects that entails the consumer law. Read More