Need to know
- CHOICE, Consumer Action, WEstjustice and the Consumer Credit Legal Service Western Australia are calling for stronger enforcement of consumer rights
- As it stands, businesses face no penalties for non-compliant behaviour
- Nearly 100% of the consumers we surveyed said businesses should face fines for shirking the Australian Consumer Law
Businesses that fail to comply with Australian Consumer Law guarantees for a right to repair, replacement or refund for customers should face fines, a coalition of consumer groups says.
CHOICE, Consumer Action, WEstjustice and the Consumer Credit Legal Service Western Australia have written a joint submission on the Commonwealth Treasury's recent proposal to beef up financial penalties for businesses not complying and offering remedy when due.
"Right now, businesses don't have to pay a penalty when they fail to meet the most basic part of the Australian Consumer Law: the obligation to fix something that's gone wrong," says CHOICE campaigner Dean Price. "People have complaint fatigue because too many businesses aren't helping people when they're meant to, because nothing meaningful happens when they break the law.
Right now, businesses don't have to pay a penalty when they fail to meet the most basic part of the Australian Consumer Law: the obligation to fix something that's gone wrong
CHOICE campaigner Dean Price
"99.69% of the people we surveyed agree that companies should be penalised when they don't give people a repair, refund or replacement when one is required by the law. Big penalties and fines are the only things that are going to force businesses to help people with faulty items."
'Major headache' getting a refund
Emily, who lives in Canberra, knows all her consumer rights back to front after having worked at a call centre for the Australian Competition and Consumer Commission. But she says even she had a "major headache" enforcing those rights after she bought a faulty TV from JB Hi-Fi.
Her new 55-inch Samsung had major audio and video faults almost straight away, so she and her partner sought a refund or replacement from JB Hi-Fi.
"It got really, really nasty, just with the way that we were treated as a customer service issue, but it was just deplorable," she says. "We couldn't get anywhere."
After eight months of complaints and escalating those complaints through JB Hi-Fi, Emily says she and her partner were eventually offered a refund.
"We were in an incredibly privileged position [because of her ACCC background] and for us to have as many headaches as we did, I have no idea how a normal consumer would get a remedy in that situation," she says. "It was just disgusting."
Failing consumers
In their joint submission, the consumer groups warn that the state of the current legislation is failing Australians.
"The status quo incentivises businesses to put up so many barriers to people getting what they are due under the law, it's no wonder people give up," says Consumer Action senior policy officer Brigette Rose.
"The introduction of strong penalties for dud products or services will help businesses do the right thing and give consumers confidence that a purchase will be of acceptable quality, fit for purpose and safe."
The status quo incentivises businesses to put up so many barriers to people getting what they are due under the law it's no wonder people give up
Consumer Action senior policy officer Brigette Rose
This joint consumer submission is guided by a range of consumer surveys conducted by CHOICE. In January 2022, we surveyed almost 10,000 members and supporters about their experiences of getting a refund, repair or replacement.
More than 2000 people shared their stories of having problems getting a remedy for a major fault or being forced to accept a repair for a major fault when they really wanted either a replacement or refund.
"The longer businesses are free to get away with denying people a repair, replacement or refund, the more it will cost people," says Price.
"CHOICE urges the Treasury to recommend strong penalties for businesses that do the wrong thing and for Minister Sukkar to guide this important legislation through parliament quickly."
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