- 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 ACL.
- Numerous specialist safety regulatory regimes complement the ACL.
- Redress is provided via tribunals, courts and ombudsmen, and 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 partly explain this, but regulator culture may also play a role.
- 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, including through:
- developing a national database of consumer intelligence – ensuring that data on consumer complaints published by ACL regulators are meaningful
- 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.
- State and territory governments should tackle the current impasse on standardising electrical goods safety laws.
- Governments should enhance ACL consumer redress, including by:
- reviewing the bodies and powers for delivering ACL alternative dispute resolution services
- implementing the Commission’s Access to Justice Arrangements recommendations.
- Previous Commission proposals to address gaps in consumer policy research and advocacy should be revisited. There are also grounds for enabling designated advocacy groups to make ‘super complaints’ to ACL regulators, subject to appropriate guidelines.
Assessments of the multiple regulator model
F3.1 The multiple regulator model appears to be operating reasonably effectively given the intrinsic difficulties of having 10 regulators administer and enforce one law. However, the limited evidence available on regulators’ resources and performance makes definitive assessments difficult. Enhanced performance reporting requirements (recommendation 4.2) would help address this limitation.
F3.2 The Australian Consumer Law (ACL) regulators communicate, coordinate and collaborate with each other through well developed governance arrangements, and have mechanisms in place to promote consistent approaches to the interpretation and application of the ACL. Nevertheless, the multiple regulator model allows for differences among jurisdictions in approaches to aspects of their administration and enforcement of the ACL, which likely create some inconsistent outcomes for consumers and for businesses.
F3.3 ACL regulators have developed policies and protocols to implement strategic and proportionate approaches to compliance and enforcement, including prioritising matters that represent higher levels of risk to consumers. The extent to which these are implemented in practice is likely to vary across regulators and there are some indications of limitations in the enforcement of the ACL.
The generic national product safety regime
R4.1 The state and ACT governments should relinquish their powers to impose compulsory recalls or interim bans. This would signal that it is the commonwealth’s responsibility to immediately respond to all product safety issues that warrant a compulsory recall or ban. In parallel with any such change in responsibilities, there should be a mechanism for state and territory governments to raise and provide input on product safety matters to the Australian Competition and Consumer Commission (ACCC) that they consider would warrant a compulsory recall or ban.
F4.1 The commonwealth government’s regulation impact assessment requirements can impede the timely implementation of national interim product bans. There would be merit in exempting interim product bans from the requirements. Permanent product bans should continue to be subject to the existing regulatory impact assessment requirements.
R4.2 ACL regulators should publish a comprehensive and comparable set of performance metrics and information to enhance their public accountability and enable improved regulator performance. Consumer Affairs Australia and New Zealand (CAANZ) could be charged to develop a reporting framework with a view to providing meaningful metrics and information on: • resources expended on regulator activities • the range and nature of regulator activities • behavioural changes attributable to regulator activities • outcomes attributable to regulator activities.
Databases on consumer complaints and incidents
F4.2 A national database of consumer complaints and product safety incidents for use by consumer regulators has merit. It would enable better identification and analysis of consumer hazards and risks, and help focus ACL regulators’ compliance and enforcement activity. CAANZ could be tasked to examine the impediments to establishing such a database, its likely benefits and costs, and, subject to the findings of that analysis, develop a plan to implement such a system.
F4.3 There are grounds for making data on consumer complaints public, but this should be done in a careful and comprehensive way to ensure its usefulness to consumers and minimise unwarranted effects on businesses. Ideally, any public register of consumer complaints and incidents should incorporate: • appropriate vetting of complaints before publication • detailed information about the complaint or incident • information on the resolution or outcome of the complaint • where feasible, a mechanism to place complaints and incidents in context. Development of a public register should involve consultation with consumers and business, and there should be subsequent reviews of its effects and effectiveness.
Enforcement tools and penalties
F4.4 There is scope to improve consistency in infringement notice powers and other remedies that the states and territories have introduced to augment the ACL ‘toolkit’.
F4.5 Maximum financial penalties available under the ACL are small relative to the benefits that a business can accrue by breaching the ACL.
Interaction between ACL and specialist regulators
F5.1 While interaction between ACL and specialist safety regulators generally works well, some changes are warranted. Options to improve the response to product safety concerns currently dealt with by joint ACL and specialist regulators’ actions include: • instituting formal arrangements to guide cooperation and coordination between building regulators and ACL regulators, and between the ACCC and some national specialist safety regulators • expanding the regulatory tools and remedies available to specialist safety regulators • introducing greater consistency in legislation underpinning the specialist safety regime for electrical goods.
Industry specific consumer regulation
F6.1 The Productivity Commission’s 2008 Review of Australia’s Consumer Policy Framework called for a process to review and reform industry specific consumer regulation that would, among other things, identify unnecessary divergences in state and territory regulation and consider the case for transferring policy and enforcement responsibilities to the commonwealth government. While there has been some progress in implementing this recommendation, reform has been limited or has stalled in some important areas, including the safety regimes for building and construction and for electrical goods.
R6.1 State and territory governments should move to agree on nationally consistent laws on electrical goods safety.
R6.2 Australian governments should establish an independent review of consumer alternative dispute resolution (ADR) mechanisms. Among other things, the review should: • assess the nature and structure of current arrangements, areas of unmet need and the appropriate institutions to deliver services • take account of differences in jurisdictions’ legal systems for the design of ADR mechanisms • have regard to recommendation 9.2 from the Productivity Commission’s 2008 Review of Australia’s Consumer Policy Framework regarding the need for effective and properly resourced ADR mechanisms to deal consistently with consumer complaints not covered by industry based ombudsmen • where state and territory ACL regulators are to continue to provide ADR services, consider options for expanding the ACL regulators’ powers, including the authority to compel businesses to cooperate with the dispute resolution process. Enhanced reporting of the ACL regulators’ ADR services (as part of the performance reporting framework outlined in finding 4.2) should inform the review.
Consumer policy research and advocacy
F6.2 In its 2008 Review of Australia’s Consumer Policy Framework, the Commission identified material gaps in consumer input in policy processes. As such gaps remain and can hamper sound policy decision making, there are grounds to revisit recommendation 11.3 from the 2008 report — that the commonwealth government should provide additional public funding to support consumer research and advocacy.
F6.3 There are grounds for enabling designated consumer bodies to lodge ‘super complaints’, on behalf of classes of consumers, with such complaints to be fast tracked by the relevant regulator. Instituting sound operational principles — including the criteria for designating consumer bodies, evidentiary requirements to support a complaint, and the process by which a regulator should respond — is an important prerequisite for an efficient super complaints process.