Kinh tế học - Chapter 13: Consumer protection legislation

This is the prescribed textbook for your course.Available NOW at your campus bookstore!Copyright © 2000 McGraw-Hill AustraliaConsumer protection legislationChapter 131Copyright © 2000 McGraw-Hill AustraliaConsumablesGoods or services valued at $40 000 or less.Goods of any value of a kind ordinarily acquired for personal, domestic or household use or consumption.Commercial road vehicles.Not acquired for resupply or for manufacture.2Copyright © 2000 McGraw-Hill AustraliaScope of the Trade Practices Act 1974 (Cwlth)CorporationsIndividuals, sole traders, partnerships and other unincorporated bodies, if engaged in - interstate trade - overseas trade - activities in S6 (Trade Practices Act) Government utilitiesProfessional bodies(State Fair Trading Acts cover other entities and activities.)3Copyright © 2000 McGraw-Hill AustraliaConstitutional basisEngage in foreign trade or commerceEngage in business using the post, telephone, radio, television or telegraph, or like servicesEngage in interstate trade, or trade within a TerritorySupply goods or services to Commonwealth organisationsEngage in conduct subject to international conventions4Copyright © 2000 McGraw-Hill AustraliaTrade Practices Act (TPA)Part IVS45: Exclusionary provisionsS46: MonopoliesS47: Exclusionary dealings S48: Resale price maintenancePart IVAS51AA: Unconscionable conductPart V (Prohibits corporations from engaging in unfair trade practices)S52(1): Misleading and deceptive conductS53-59: False or misleading representations5Copyright © 2000 McGraw-Hill AustraliaTPA (continued)Part V (continued)S60: Harassment and coercion in relation to the supply of goods and servicesS61: Pyramid sellingS63A: Sending unsolicited cardsS64: Payment for unsolicited goods or servicesS65-65D: Safety of products sold to consumers; product information requirements6Copyright © 2000 McGraw-Hill AustraliaUnfair practices (part V: TPA)S52 (1): Prohibition on misleading and deceptive conduct Advertising of goods and services or in other activities that take place before contract entered into if: - conduct prohibited is directed at conduct engaged  in by corporations - conduct must occur in the course of trade and commerce - conduct engaged in must be misleading or likely to mislead or deceiveRemedies:- Civil action for damages Injunction to stop misleading or deceptive conduct Probation orders Community services orders Corrective advertising orders Adverse publicity orders7Copyright © 2000 McGraw-Hill AustraliaUnfair practices (part IVA: TPA)Prohibition on unconscionable conduct, i.e. where a stronger party takes advantage of another party’s weakness or ignorance.S51AA: General duty on corporations to trade fairly in relation to consumers.S51AB: Deals with unconscionable conduct in connection with the supply of goods and services to consumers.Remedies: Contract void Contract varied Refusing to enforce contract Directing refund of money/return of property Ordering repair or provision of parts for goodsPart IVBS51AC: Protects small businesses from unconscionable commercial conduct (for transactions up to $3million).S51AD: Codes of conduct8Copyright © 2000 McGraw-Hill AustraliaUnfair practices (part IVA:TPA)Unconscionable conduct is where one party to a transaction is at a disadvantage, because of: - age - sickness - sex - illiteracy - poverty - lack of explanation when required - language (i.e. non-English speaking), and the other party takes advantage of this for their own gain.9Copyright © 2000 McGraw-Hill AustraliaBasis of unconscionable conductWith regard to consumers:The relative strengths of the bargaining positions of the partiesWhether the consumer is being asked to comply with conditions that are not reasonably necessary to protect the legitimate interests of the corporationWhether any documentation given to the consumer was intelligible to the consumer Whether there was any undue influence or pressure exertedThe type of deal that the corporation’s competitors could have offered the consumer. 10Copyright © 2000 McGraw-Hill AustraliaConduct specifically prohibited (part V: S53 - TPA)False or misleading representations that may induce consumersto acquire goods and services with respect to:(a)/(aa): standard, quality, value, grade, composition, style, mode or history of goods or services(b): newness of goods(bb): agreement to acquire the goods(c): the sponsorship, approval, performance, characteristics, accessories, uses or benefits of goods or services(d) sponsorship, approval or affiliation of a corporation(e): price of goods or services(ea): availability of repair, facilities or spare parts(eb): origin of goods(f): a buyer’s need for goods or services(g): existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (e.g. no refunds) 11Copyright © 2000 McGraw-Hill AustraliaConduct specifically prohibited (part V: TPA)False or misleading representations thatmay induce consumers to acquire goodsor services with respect to:S53A: All types of dealings with landS53B: Persons seeking employment as to availabilitymatureterms or conditions, etc.S53C: Full cash price12Copyright © 2000 McGraw-Hill AustraliaConduct specifically prohibited (part V: TPA)False or misleading statements with respect to:S54: Offering gifts and prizesS55/55A: Conduct that may mislead the publicS56: Bait advertisingS57: Referral sellingS58: Accepting payment without the intention to supply goods or servicesS59: Misleading statements about the profits of home-run businesses13Copyright © 2000 McGraw-Hill AustraliaConduct specifically prohibited (part V: TPA)S60: Harassment and coercion in relation to the supply of goods and servicesS61: Pyramid sellingS63A: Sending unsolicited cardsS64: Payment for unsolicited goods or services14Copyright © 2000 McGraw-Hill AustraliaProduct safety and information (part V: TPA)Division IA S65-S65D: Safety of products sold to consumers Product information requirementsS65F: Mandatory recall of goods15Copyright © 2000 McGraw-Hill AustraliaComparison of TPA and Sale of Goods Act16Copyright © 2000 McGraw-Hill AustraliaImplied conditions Not necessarily applicable to auction salesS70: Goods will correspond with their description (for supply of goods by corporations to consumers) S71(1): Goods will be of merchantable quality (‘no refund’ signs are illegal) S72(2): Fit for purposeS72: Sale by sample17Copyright © 2000 McGraw-Hill AustraliaRemedies for breach of implied conditionBuyer can:rescind the contractclaim damages.18Copyright © 2000 McGraw-Hill AustraliaImplied warrantiesAs to goods: - right to sell - quiet possession - free from encumbrancesAs to services: - rendered with due care and skill - materials supplied as part of service must be reasonably fit for their purpose19Copyright © 2000 McGraw-Hill AustraliaRemedy for breach of implied warrantyBuyer can sue for damages 20Copyright © 2000 McGraw-Hill AustraliaManufacturer’s liability (part V: TPA)Division 2AConsumer may take action if: - the goods are defective - the goods have been supplied through sale/ lease/exchange/hire.1A: Product safety and product information2: Conditions and warranties in consumer transactions2A: Actions against manufacturers and importers of goods3: Miscellaneous21Copyright © 2000 McGraw-Hill AustraliaRemedies for breaches of part V - TPACivil remediesS80: InjunctionsS80A: DisclosureS82: Damages OrdersS87: Ancillary OrdersS163A: DeclarationS163A: ProhibitionS163A: CertiorariS163A: MandamusCriminal Penalties (except S52):$1 100 000 in case of a corporation$220 000 in case of a natural person22Copyright © 2000 McGraw-Hill AustraliaS85: Defences to breachesThat the contravention was due to a reasonable mistake.That the contravention was in reliance on information supplied by another person.That the default was caused by the fault of another person.That the default was due to an accident or cause beyond the control of the defendant.23Copyright © 2000 McGraw-Hill AustraliaACCCAustralian Competition and Consumer CommissionAdministers the Trade Practices Act.Ensures requirements in the Act are complied with by traders.24Copyright © 2000 McGraw-Hill AustraliaPowers of ACCCAdministering the Trade Practices ActInvestigating and prosecuting breaches of the ActHearing disputes under the ActConducting research, and providing consumers and traders with information on their respective rightsObtaining evidence, including documentary evidenceEstablishing and administering standards relevant to product safety25Copyright © 2000 McGraw-Hill AustraliaConsumer complaintCONSUMER COMPLAINT ACCC DISPUTE SETTLE BEFORE COURT ACTIONCOURT ACTION26Copyright © 2000 McGraw-Hill AustraliaSettle before courtPay restitution to consumers who have been affected by illegal conductProvide an undertaking to ACCC that steps will be taken to ensure Act complied with and future breaches avoided27Copyright © 2000 McGraw-Hill AustraliaCourt actionCourt action dependant on followingconsiderations:Educative or deterrent effectBlatant disregard of lawSignificant public detrimentNeed to test the limits of the act28Copyright © 2000 McGraw-Hill AustraliaAustralian Competition TribunalAustralian Competition Tribunal is the appeal body from the ACCC.29Copyright © 2000 McGraw-Hill AustraliaDoor-to-door salesConsumer provided with ten-day cooling-off period.Supplier prohibited from receiving money until cooling-off period has expired. 30Copyright © 2000 McGraw-Hill AustraliaSmall Claims Tribunal- consumer vs. traderAuthority to hear consumer claimsOperationLimit imposed on operationRight of appeal and costs (no right of appeal)How to make a claim31Copyright © 2000 McGraw-Hill AustraliaRole of consumer protection agenciesTo educate the community about their rights as consumersTo handle complaints made by consumers against providers of goods and servicesTo provide information to consumers32Copyright © 2000 McGraw-Hill Australia