Closing loopholes and fixing the gaps
CHOICE is fighting hard for essential legal reforms that include allowing consumers to uncover complaints about dodgy products before they buy them, and preventing health insurers from refusing to pay genuine claims.
In our hard-hitting, wide-ranging submission to the Australian Consumer Law Review, we've targeted six key changes that are essential to holding companies to account for their products and their obligations to you, the consumer.
"The Australian Consumer Law has been a success story in many ways, providing Australians with clear rights to refunds, replacements and repairs when things you bought don't do what they should," says CHOICE CEO Alan Kirkland.
"But there are still some major improvements that could be made to better protect us from unsafe products and dodgy businesses," Mr Kirkland says.
CHOICE's six key reforms
- Outlawing predatory businesses that rely on exploiting vulnerable consumers, like funeral insurance and payday lending.
- An obligation for suppliers to make sure the things they sell are safe.
- As the CommInsure scandal shows, the insurance industry is rife with loopholes that hurt the consumer. Unfair contract terms in insurance contracts should be banned.
- How long should a product last? For a 'reasonable' period of time? Australians should be given clear guidance about how long products should last.
- Non-disclosure agreements are being increasingly used to silence consumers and restrict your rights. These should be banned where you, the consumer, have existing rights to the same or greater remedies through the Australian Consumer Law.
- Penalties for some breaches of the Australian Consumer Law fall well short of levels that would deter major businesses from ripping off customers. To fix this, the existing $1.1m penalties available for breaches of the specific protections in the ACL should be raised to up to $10 million per breach.
Safety issues out in the open
Companies have no legal obligation in this country to ensure the products you buy are not harmful or unsafe. And if a product causes death, injury or illness this information is not available to consumers.
Mr Kirkland says, "It is concerning that companies have made 10,000 mandatory safety reports since 2011, after their products injured a consumer, yet the information remains confidential. This vital safety information should be made public to alert you to the risks you face.
"Right now, everyday tasks put us at risk – doing our laundry with our Samsung washing machine might lead to a major house fire, cooking meals using a high-end Thermomix might land us in hospital with devastating burns, and unsecured button batteries can kill children.
"We urgently need to fix this, and we can do it by making it clear that suppliers of products have a legal obligation to make sure that the products they sell are safe."
CHOICE has identified dangerous gaps in the laws that govern insurance – like the exemption from unfair contract terms. These have caused real hardship for people like the Victorian who was denied a travel insurance claim due to a pre-existing, but undiagnosed mental health condition.
"Why on earth would we let insurers include unfair terms in their contracts when no other industry is allowed to get away with this?" asks Mr Kirkland.
Bigger fines for bad business
CHOICE is also calling for an increase in fines for companies that breach the law – beefing up the might of the regulator.
"As we saw in the recent Nurofen decision, the current cap on fines means that businesses can get away with dodgy behaviour – Reckitt Benckiser's measly $1.7 million fine doesn't come close to the likely $63 million in extra profits the company made through misleading consumers.
"In 2016, the Australian Consumer Law has done a lot of good for Australian consumers. But it's time to fix the gaps, close the loopholes, and make the law work for all consumers," says Mr Kirkland.
For more on these issues from CHOICE:
Read our full submission to the Australian Consumer Law review 2016.