Consumer law enforcement and administration

• Despite the adoption of a single Australian Consumer Law (ACL) in 2011, Australia's consumer protection framework remains complex:
  • Two Commonwealth and eight State and Territory regulators administer and enforce the generic ACL.
  • Numerous specialist safety regulatory regimes complement the ACL.
  • Redress is provided via ombudsmen, tribunals and courts, as well as most ACL regulators.
• The multiple-regulator model for the ACL appears to be operating reasonably effectively given the intrinsic challenges in having 10 regulators administer and enforce one law.
  • The ACL regulators communicate, coordinate and collaborate with each other through well-developed governance arrangements.
  • Some regulators have been criticised for undertaking insufficient enforcement. Limited resources may partly explain this.
  • However, the limited evidence available on regulators' resources and performance makes definitive assessments difficult.
• There is scope to strengthen the ACL's administration and enforcement. Matters to be addressed include:
  • developing a national database of consumer complaints and incidents
  • providing all State and Territory ACL regulators with the full suite of enforcement tools
  • increasing maximum financial penalties for breaches of the ACL
  • exempting interim product bans from Commonwealth regulatory impact assessments
  • centralising powers for interim product bans and compulsory recalls in the ACCC
  • improving the transparency of the resourcing and performance of the ACL regulators.
• The ACL regulators and specialist safety regulators generally understand the delineation of their remits and interact effectively, notwithstanding a handful of problematic cases. Consumers and suppliers are not always clear about which regulator to contact but they are typically redirected to the right regulator in a timely manner.
• Interactions between ACL and specialist safety regulators could be enhanced through:
  • greater information sharing between ACL and specialist regulators
  • addressing deficiencies in the tools and remedies available to specialist regulators
  • regular national forums of building and construction regulators
  • greater national consistency in the laws underpinning electrical goods safety.
• Governments should revisit previous Productivity Commission recommendations on industry- specific consumer regulation, consumer dispute resolution, consumer research and advocacy, and access to justice.

Improving consumer protection

Higher penalties, and a fast-tracked, more national approach to ban and recall unsafe products, such as the hoverboards that caused several house fires earlier this year, are among reforms in a Productivity Commission draft report released today.

The report calls for the States and Territories to relinquish their rarely used powers to issue interim bans and compulsory recalls in relation to unsafe products, to make it clearer that it is the ACCC's job to respond when a problem emerges that may warrant a ban or recall under the Australian Consumer Law.

'Australia has an increasingly national market for goods, and consumers and businesses are entitled to expect the same response wherever the product is available. There is also the case for some 'red tape reform' to make the national process faster,' Commissioner Julie Abramson said.

The Productivity Commission is reviewing the complex arrangements for administering and enforcing the Australian Consumer Law. Introduced Australia-wide in 2011, the law covers misleading advertising, door-to-door sales, refunds, and the safety and durability of everyday goods.

'Having 10 separate regulatory agencies to administer one consumer law, plus a multitude of specialist regulators in areas like food safety, electrical appliances and building products, could give rise to confusion, duplication, inconsistency and ineffective enforcement,' Commissioner Julie Abramson said.

'There is definitely scope to improve the system, but the regulatory agencies have put a lot of effort into mitigating these risks and generally appear to be working together well.'

'From the point of view of a consumer with a problem or a business concerned about their obligations, they just want to be directed to the right place as quickly as possible and the Commission found that this was generally the case,' Commissioner Julie Abramson said.

But the report says that the maximum penalties for a breach of the consumer law, currently $1.1 million for a company and $220,000 for an individual, are often seen as insignificant when compared to the commercial returns gained and are out of step with penalties currently available under the Competition laws.

The Productivity Commission is seeking further information and feedback following the release of their draft report Consumer Law Enforcement and Administration and details can be found at: www.pc.gov.au/inquiries/current/consumer-law

• Preliminaries: Cover, Copyright, Opportunity for further comment, Terms of reference, Contents, Acknowledgments and Abbreviations
• Overview - including key points
• Draft recommendations, findings and information requests
• Chapter 1 About the study
  • 1.1 The study's scope
  • 1.2 The Commission's approach
• Chapter 2 The consumer protection landscape
  • 2.1 Recent changes to the consumer protection landscape in Australia
  • 2.2 Administration and enforcement of the ACL
  • 2.3 Specialist consumer protection regulation
  • 2.4 Other elements of the consumer protection landscape
• Chapter 3 How is the ACL multiple-regulator model performing?
  • 3.1 Overview of the operation of the multiple-regulator model
  • 3.2 Consistency in administration and enforcement
  • 3.3 Strategies for compliance and enforcement
• Chapter 4 Strengthening enforcement and administration under the model
  • 4.1 Institutional arrangements for the generic national product safety regime
  • 4.2 Intelligence gathering and sharing
  • 4.3 Enforcement tools and penalties
  • 4.4 Accountability and performance reporting
• Chapter 5 Interaction between specialist safety and ACL regulators
  • 5.1 Australia's specialist safety regimes
  • 5.2 Regulators' understanding of the delineation of their responsibilities
  • 5.3 Consumers' and suppliers' understanding of the delineation of regulatory responsibilities
  • 5.4 Interaction between ACL and specialist safety regulators
  • 5.5 How might interaction be improved?
• Chapter 6 Other reforms to the consumer protection framework
  • 6.1 Reform of industry-specific consumer regulation
  • 6.2 Consumer redress
  • 6.3 Research and advocacy as inputs into policy
• Appendix A Terms of reference
• Appendix B Consultation
• References