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Modernise the TPA for better consumer protection: ACCC

Modernise the TPA for better consumer protection: ACCC

UNIFORM FAIR trading laws, consumer redress and civil pecuniary penalties are three improvements the Australian Competition & Consumer Commission (ACCC) wants to see made to the Trade…

UNIFORM FAIR trading laws, consumer redress and civil pecuniary penalties are three improvements the Australian Competition & Consumer Commission (ACCC) wants to see made to the Trade Practices Act 1974.

Speaking at the National Consumer Congress in Melbourne, the ACCC’s chairman Graeme Samuel said although the Act allows for flexibility in the way the ACCC addresses consumer protection issues, the legislation should still be modernised to meet the needs of the present day economy.

“While our system is essentially sound, there is scope for some significant change,” Samuel said.

“For our laws to remain relevant they need to address concerns including ensuring consistency across jurisdictions, applying the appropriate level of penalties to allow for a swift response to arising problems and being able to respond effectively on behalf of a large group of consumers that may be affected by particular conduct.”

These improvements formed part of the ACCC’s submission to the Productivity Commission’s review on the consumer policy framework.

Samuel said civil pecuniary penalties must be added to the list of disciplinary measures that can currently only be sought through criminal proceedings when instances of wrongdoing arise.

“Criminal actions are slow and require significant resources, not to mention the need to meet a very high standard of proof to achieve a result,” the chairman said.

“The ability to obtain civil pecuniary penalties, declarations, injunctive relief, and other measures such as corrective advertising within a single action would significantly enhance the ability of the ACCC to obtain effective outcomes and provide a higher degree of deterrence,” he said.

According to Samuel, the ACCC also needs the ability to seek redress through court orders on behalf of large numbers of consumers without the need for individual written consent.

“In cases involving large numbers of consumers over a broad geographic region — exactly the type of case the ACCC is best placed to take, and increasingly likely to arise as markets become more national and international in character — the difficulties of obtaining written consent from thousands of consumers is prohibitive.”

Such a reform would greatly enhance the Act’s effectiveness, as Samuel believes it “would increase deterrence against wrongdoing, and provide consumers the ability to gain redress, particularly in situations where many consumers may have lost small amounts”.

Samuel would also like to see the inconsistency between state, territory and Commonwealth fair trading laws addressed.

These inconsistencies include unfair contract terms legislation in Victoria; different standards for what constitutes harassment or coercion; different requirements for the conduct of door-to-door and telemarketing activities; different definitions of pyramid selling schemes; and different enforcement powers in different jurisdictions.

“At the same time as the level of divergence between laws appears to be increasing, the need for uniformity is becoming more urgent,” Samuel said, citing the burden of costs on business, consumers, governments and regulators.

However, the ASIC chairman said a uniform legislative framework would take nothing away from the fundamental role of national, state and territory regulators.

“The primary role of the ACCC is to promote compliance by taking up systemic issues of national significance that are causing widespread detriment to consumers.”

See the Opinion on page 19 for more from Graeme Samuel on consumer protection

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