2. Consumer redress and remedies

awareness and self-help

state government organisations

federal government organisations

industry organisations

the role of tribunals and courts

the role of non-government organisations

the role of the media

consumer remedies: individual, society

recognise the importance of awareness and
self-help

examine the range of different remedies
available to consumers

evaluate the effectiveness of non-legal and
legal measures in achieving justice for
consumer
2. Consumer redress and remedies

Awareness and self-help
For this section the syllabus only requires you to ‘recognise’ the importance of awareness.
What does this mean then?
Self-help involves consumers taking complaints over defective products or poor service directly to the retailer or
supplier. If an individual attempts an amicable resolution of the problem, suppliers should appreciate the nonconfrontational approach and be prepared to listen and respond to a consumer’s concerns. Similarly, if a consumer
notifies a supplier that there is a problem with a particular product and their concerns are ignored, then government
agencies are more likely to investigate the consumer’s complaints.
It is recommended that consumers first approach would be to contact the retailer or manufacturer to make them aware
of the problem or issue. The retailer or manufacturer then becomes aware of a major problem that needs to be rectified.
In extreme cases, all the stocks of a particular product may need to be recalled. A dangerous toy, for example, would
need to be recalled to avoid injuries to young children.
When returning a product, consumers should:
• provide a sales docket where possible, as many suppliers are reluctant to exchange a good without a store receipt
• give details of the fault with the product
• indicate at which store it was bought and on what day
• preferably make sure it has been promptly returned as soon as the fault or problem is identified.
Consumers should always check the guarantees and warranties that are associated with the purchase of a good.
Complaints to suppliers
Under the law, consumers can seek redress in the form of repair, replacement or refund. If the product or service
supplied does not do the job that the customer was led to believe it would, or there is some serious fault in the product,
the consumer is entitled to seek a legal remedy. In most cases, this is initially achieved by the consumer complaining in
person to the supplier. Usually, the supplier of a faulty product will repair or replace the product or provide a refund.
This is because most suppliers are aware of the statutory protections in place for consumers, but also because it is an
opportunity to foster goodwill and customer loyalty. A dissatisfied customer, whose complaint is taken seriously and
promptly addressed, can become an ambassador for that supplier through word of mouth.
Complaints to manufacturers
Consumers do not always have direct access to manufacturers. Once the location fo the manufacturer has been
determined, it is prudent for the aggrieved consumer to contact the firm via telephone and in writing. Under the Trade
Practices Act 1974 (Cth), manufacturers are legally obliged to stand by their warranties or guarantees and to ensure a
reasonable supply of spare parts and repair facilities for goods that cost less than $40 000 and are for personal or
household use. Manufacturers must also meet the requirements for merchantable quality and fitness for purpose.
When returning a product, consumers should:
-
Provide a sales docket where possible, as many suppliers are reluctant to exchange a good without a
store receipt
-
Give details of the fault with the product
-
Indicate at which store it was bought and on what date
-
Preferably make sure it has been promptly returned as soon as the fault or problem is identified
Consumers should always check the guarantees and warranties that are associated with the purchase of a good
ACCC v. Prouds Jewellers Pty Ltd [2008] FCA 75
The ACCC took legal action in the Federal Court against Prouds Jewellers for what is referred to as ‘was/now’ pricing
or ‘dual ticket’ pricing. This refers to a common sales strategy in which retailers suggest that something used to sell for
a much higher price but that now this price has been reduced or slashed to a much lower price.
Prouds had placed advertisements for 17 items in 2 of its marketing catalogues. The items where displayed with signs
saying the price were a certain price but are now a lower price. Many of the items had never been on sale at the ‘was’
price. The court found this to be a case of misleading and deceptive conduct. The ACCC had argued that advertised
discounts must be real and not illusory, and that goods must have been offered for sale immediately prior to the
‘was/now’ sale at the ‘was’ price.

Sate and federal government organisations
There are a number of state and federal government organisations that deal with consumer rights, consumer complaints
and consumer interests.
State
 NSW Office of Fair Trading
 Community Services Commission
Federal
 Australia Competition & Consumer
Commission (ACCC)
 Australian Securities & Investments
Commission (ASIC)
The roles of these organisations vary, but they can include:
a.
Educating the public about their rights in the area of consumer law
b.
Providing advice to consumers about negotiating with providers of goods and services, and assisting them in
their negotiations
c.
Advising the government about consumer issues
d.
Investigating serious complaints
e.
In the event of a breach, applying to the relevant tribunal or court to bring an action
Criteria
NSW Office of Fair Trading
ACCC
NSW
Australia
Jurisdiction
Specific roles
-
Educating the public about
-
consumer rights
-
marketplace
Informing consumers about
Assisting consumers with their
with federal laws
-
Facilitate competition in a semi-
manufacturers & suppliers
regulated market – benefits
Investigating ongoing and serious
consumers
-
Compliments state consumer affairs
agencies
Applying penalties & remedies for
consumers
-
Responsibility for ensuring
businesses & individuals comply
complaints
-
-
common illegal practices
negotiations with retailers,
-
Role is to promote fair trade in the
-
It regulates national industries such
Referring serious breaches of the
as communications & energy
law to tribunals & courts
transport
-
Imposes certain fines & injunctions
on non-compliant issues
Damaged bridal gown (Amy)
Specific
PT Garuda Indonesia Ltd for alleged price
fixing of air freight
matters/cases
Issues
Amy’s gown was damaged, she wanted a
Arrangements or understandings with other
refund and store claimed to not give refunds
international air cargo carriers that had the
purpose or effect of fixing price in air cargo
industry
Impact/result
Fully refunded deposit after going to tribunal
Seeking declarations, injunctive relief,
pecuniary penalties & costs up to $41 million
in penalties against respondent airlines

Industry organisations
There are a number of industry organisations that deal with consumer complaints and assist with remedies. There are
3 major types of industry organisation schemes that address consumer complaints:
Category
Role
Industry-based dispute
Customer-focused
Industry-based
resolution
compliance programs
ombudsman
Dispute resolution schemes
Internal self-regulatory
Industry officer/investigator
designed to provide consumer
programs used by individual
that takes complaints from
remedies, enhance business
corporations to ensure they
consumers about agencies,
reputation, and support claims
meet their legal obligations to
departments or retail
that these industries are self-
consumers, and to remedy any
providers and investigates
regulated
breach. Compliance programs
those complaints in order to
are also designed to improve
reach a resolution that is fair
customer rights and are often
to both sides
linked to the strategic goals of
companies
Example
Master Builders Australia –
The Telecommunication
established standards which its
Industry Ombudsman (TIO)
members are bound.
is an industry-based and
Consumers can make
funded disputes resolution
complaints, however the
scheme for small businesses
industry group’s primary duty
and residential customers
is to its members
using telecommunication
services. The TIO provides
free, independent, informal
and hopefully speedy
resolution of complaints and
disputes regarding
telecommunications services

The role of tribunals and courts
A tribunal is an adjudicative body that is chosen specifically, often by the government, to decide on questions of a
particular type. Consumer redress can be obtained through Consumer, Trader and Tenancy Tribunal (CTTT).
Consumer, Trader and Tenancy Tribunal (TCCC) – the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW)
governs the operation of this tribunal. The role of the CTTT is to resolve disputes between tenants, landlords, traders
and consumers in a timely and effective manner. The Tribunal conducts hearings throughout NSW and deals with
matters under the following 9 divisions:
1.
Tenancy
2.
Social housing
3.
Home building
4.
Strata and community schemes
5.
Retirement villages
6.
Residential parks
7.
Motor vehicles
8.
General and commercial
This means consumers can bring an action against suppliers or sellers of goods and services. The claim must be for
payment of money or performance valued at no more than $10 000 for general disputes. Claims are allowed up to and in
excess of $25 000 for disputes involving motor vehicles and building work.
After the parties to a dispute have had an opportunity to conciliate, if an agreement is not reached, an application will
be heard by the Tribunal. CTTT hearings are generally informal, but formal hearings can be held on request and
witnesses can be called. This process is an arbitration – where an independent 3rd party (tribunal member) listens to
submissions from the 2 parties in dispute and makes a binding decision on them.
A ‘tribunal member’ presides at the hearing. Both parties are given an opportunity to present their evidence and ask
questions of each other. The tribunal member may also ask that evidence be sworn or affirmed. After both parties have
presented their evidence, the tribunal member will make orders and explain the reasoning behind them. Both parties to
the dispute usually receive a typed copy of the order within 7 days from the completion of the hearing. Appeals against
a CTTT order can be made to the District Court of NSW on any matter of law. This is a change from the past as
previously appeals were heard in the Supreme Court – this change is designed to speed up the process of redress and
reduce the costs involved
Case Law: Alderman v. Everything Totally Cool (General) [2005] NSWCTTT 68
Mr Alderman bought a replica miniature Harley motorbike from Everything Totally Cool. The salesperson for
Everything Totally Cool said Alderman could legally ride the bike on the road without needing to have it registered. He
was told it was ‘like a bike’. However, soon after the purchase was made, the law changed and registration was required
for the motorbike. Alderman took the matter to the CTTT and the tribunal held that the salesperson’s representation led
Alderman to buy the bike and he was entitled to a full refund when he returned it.
The courts
If consumers are unable to obtain a remedy through independent avenues (self-help), ADR or the relevant tribunals, the
last resort is court-based litigation (civil proceedings whereby disputing parties seek a binding remedy by a court).
If a contract is breached, or an action is available under statute, consumers can take the matter to the court with the most
appropriate jurisdiction. Court procedures, however, involve more time and expense than other dispute resolution
procedures.
In recent times, court-based remedies have proven to be very costly. This has given rise to class action which allows
aggrieved consumers with similar complaints to pursue their legal action collectively against a single defendant.
Where a consumer dispute involves federal laws, consumers will bring all their claims to either the Federal Magistrate
Court or the Federal Court – depending on the size of the claim
Jurisdiction of each of the state courts
Court
Description
Small claims
Orders for amounts up to $3000
division
Local
Claims for amounts up to $40 000 are dealt with here
District
Claims for amounts up to $750 000 are dealt with here. If the parties to a case agree, a claim
for more than $750 000 may still be heard here
Supreme
If such an agreement is not reached for a large amount, the matter will need to be heard in the
Supreme Court
Mitigating losses – there is also a need for persons claiming damages to have tried to mitigate their losses.

The role of non-government organisations
A variety of NGO’s represents the interests of consumers and address consumer concerns. Many of these are advocacy
groups that attempt to influence the legislative program of political parties in government. While these organisations do
not generally take on and pursue individual complaints, they have links to resources that do. These include:
 Consumer Credit Legal Centre (NSW) Inc. – a community legal centre specialising in issues related to
financial services, such as consumer credit, banking and debt recovery. It has a particular focus on issues
concerning economically disadvantaged consumers
 Choice is a non-profit organisation that researches and campaigns on behalf of consumers and publishes
Choice magazine. Choice provides consumers with independent advice on product quality and product value
for money
 Consumers’ Federation of Australia – the national peak body for Australian consumer groups. Its member
include legal centres, local organisations and public interest bodies
 National Roads and Motorist Association (NRMA) – advises members on consumer issues, tests motor
vehicles and produces information on the performance/safety of cars and related products

The role of the media
The media plays a particularly important role in consumer law. New products that have mass appeal may be displayed
on commercial television, on the internet or in magazines and newspapers. The benefits of new consumer technology
can also be highlighted by the media. The great diversity of products available on the market can be displayed and
advertised in the media to inform consumers and entice them to buy various products.
Companies that sell goods and services to the public are very aware of the value of a good corporate image. Certain
brand names have developed a reputation for quality and reliability over several generations and enormous efforts are
made by businesses to maintain their good name.
The media can also heighten consumer awareness of unsafe products or dishonest sales techniques. Although the media
sometimes sensationalises issues, this can be beneficial if it results in inferior products being taken off the market.
The media has been widely used in recent years to inform consumers about the health consequences of smoking
cigarettes. Ads encouraging smokers to quit have become more graphic and disturbing in an attempt to shake consumers
out of their complacency.

Consumer remedies: individual, society
The individual
The individual can approach most reputable sellers and suppliers with confidence in the knowledge that any complaints
will be considered and, hopefully, adequately addressed. There will however, be issues that concern consumers in some
of their day-to-day transactions.
Common causes for dissatisfaction for consumers include:
-
Dealing with private citizens who do not have appropriate qualifications to carry out repair work, or who are
not adequately covered by workers’ compensation insurance or public liability insurance
-
Being over-charged for services, including bank fees
-
Being sold faulty goods
-
Experiencing difficulties in gaining spare parts of being charged excessively for replacement parts
-
Being pressured into buying goods or signing contracts including for e.g. membership of sporting gyms or
mobile phone agreements
It should be noted that despite store signs to the contrary, a consumer has a right to a refund when goods are not fir for
purpose or are not of merchantable quality.
Actions in tort
Torts are civil wrongs and the most common tort is negligence. Tough consumers may bring actions before the courts
for breach of contract, there are many instances where consumers either need or are better placed to bring a claim of
negligence to the courts.
Case Law: Shoeys Pty Ltd v. Allan (1991) Aust Torts Repts 81–104
The plaintiff, who was 76 years old, was injured when she slipped and fell on vegetable matter in the defendant’s store.
The store was held to be negligent. The store (Shoeys) appealed to the NSW Court of Appeal. In dismissing the appeal,
the Court held that a store is required to adopt a system of routine inspections and cleaning of high-risk areas, in this
case the area where fresh produce was on display. If a store fails to conduct these checks, then it has breached the duty
of care that it owes to its customers.
Mediation and conciliation
The Community Justice Centres Act 1983 (NSW) allows small consumer claims and other minor matters to be resolved
through mediation. A mediator is a mutual individual who attempts to resolve disputes between other parties.
Mediation allows an exchange of views and the success of the negotiations is in the hands of those involved in the
dispute.
Conciliation involves the use of an independent 3 rd party, who helps direct a meeting between 2 parties in dispute.
Proceedings tend to be more formal than is the case with mediation.
Consumer law offers a range of remedies to consumers. Typical remedies include:
-
Rescission of a contract – if contract is overwhelmingly unfair to one of the parties or made under duress or
of non-legal capacity the courts mat rescind or set the contract aside
-
Payment of damages – when a court awards a monetary sum as compensation for losses incurred by one arty
due to breaches by another party.
-
Court orders – these may include: injunctions to stop unscrupulous persons from engaging in some unfair
practice (faulty items, deceptive ads, scams) – court may also issue an order for specific performance which
compels a party to complete their obligation under a contract
Remedies for society
In cases where the matter is referred to the courts by the ACCC, the NSW Office of Fair Trading or a similar body, the
courts may, if the law has been breached, make orders including:
In some circumstances the faulty product being sold is actually dangerous or injurious to people’s health. In this case a
large number of the consumers who have suffered a significant loss may join together to lodge a class action against the
seller. E.g. cigarettes
Types of remedies available:
s
perfo
rmance
Society can benefit from the ‘naming and shaming’ of companies who have breached provisions in the Trade Practices
Act. The ACCC, NSW Office of Fair Trading and the courts can draw to the public’s attention the dishonest sales
techniques employed by some businesses.
Australia is a member of the international consumer protection and enforcement network. They share information about
cross border commercial activities such as scams and fraud. There is also increasing awareness of contracts made on the
internet.
Evaluation of consumer remedies – individual and society based
Type of remedy
Apology
Repair
Advantages
Disadvantages
Obtainable using self-help redress.
Limited remedy by itself.
Consumer’s complaints are acknowledged.
Is it genuine? Talk is cheap.
Obtainable using self-help redress.
Can be a time consuming remedy.
Inexpensive and fixes the problem.
Not necessarily a strong deterrent for
manufacturers.
Refund
Obtainable using self-help redress.
Consumer is left without a product.
Consumer suffers no financial loss.
Replacement
Obtainable using self-help redress.
Suffered inconvenience.
Consumer has access to new product – they
suffer no loss.
Rescission
Injunction
Returns the aggrieved consumer to the
Attained through formal mechanisms (e.g.
position they were in before the contract
courts) – time/money.
(i.e. no financial loss).
Contract proved ‘fruitless’.
Enforceable order that protects society
Attained through formal mechanisms (e.g.
(potential consumers) from detriment
courts) – time/money.
(negative impacts)
Detriment may have already been felt by
some customers.
Often reactive not proactive.
Specific
performance
Enforceable orders that ensure obligations
Attained through formal mechanisms (e.g.
are met under contracts.
courts) – time/money.
Consumers are not left stranded in the
Consumer has suffered in the interim
middle of a contract.
(meantime), waiting for completion of
contract.
Damages
Ensures consumers do not suffer
Usually attained through formal
financially.
mechanisms of redress (cost/time issues).
Enforceable orders.
May not cover inconvenience resulting
from the experience.
Corrective
Ensures errors and illegal practices are
Does not specifically benefit a consumer
advertising
properly acknowledged.
who has already suffered as a result o the
Benefits society as a whole (e.g. future
deceptive or incorrect advertising.
consumers).
Without further penalty, it is arguably a
Usually combined with fine/penalty to
‘slap on the wrist’.
punish and deter suppliers and
manufacturers.
Ban/product recall
Fines/penalties
Safety – dangerous products are not
Often reactive and not proactive measure.
allowed into markets.
Detriment may have already been suffered.
Maintains high standards in manufacturing.
Recalls are often false alarms
Deterrent for suppliers and manufacturers.
Large businesses may be less deterred.
Society is compensated through the
revenue raised.
SUMMARY OF LEGISLATION

Consumer, Trader and Tenancy Tribunal Act 2001 (NSW)

Courts and Crimes Legislation Amendment Act 2008 (NSW)

Community Justice Centres Act 1983 (NSW)

Fair Trading Amendment (Treadmills) Regulation 2008 (NSW)

National Consumer Credit Protection (Fees) Act 2009 (Cwlth)

Trade Practices Act 1974 (Cwlth)
MULTIPLE-CHOICE QUESTIONS
1 A product recall occurs in what circumstances?
A When goods are no longer popular
B When goods are found to be unsafe
C If the government wishes to inspect the goods
D If the price is set too high
2 Which of the following is a role of the NSW Office of Fair Trading?
A Informing consumers about common illegal sales practices and naming companies that are
often reported for dishonest dealings
B Setting prices for many commonly used consumer items
C Taking legal action against international companies
D Travelling overseas to see how goods are made in other countries
3 Which of the following is an important role of the Consumer, Trader and Tenancy Tribunal?
A Taking on the functions of a Local Court
B Investigating breaches of the Trade Practices Act 1974
C Setting interest rates on consumer loans
D Providing dispute resolution opportunities
4 Why do many commercial agreements provide for the arbitration of disputes?
A The courts never want to hear disputes over commercial issues.
B The parties want to be able to renegotiate the contract quite regularly.
C It allows for alternate dispute resolution that both parties have endorsed.
D It scares one of the parties into doing what the other party wants.
5 If a person takes a complaint to court on behalf of a large number of people who all suffered as a result of a
company’s misleading and deceptive conduct, what is this called?
A Retribution
B Consumer redress
C Exemplary litigation
D A class action
SHORT-ANSWER QUESTIONS
1 Outline the role of industry organisations in regard to consumer law.
2 Outline how the media can be used in consumer law.
3 Describe the role of state and federal government organisations in regard to consumer law.
4 Explain how consumers can use self-help strategies to deal with problems encountered when buying goods and
services.
5 Explain the role of courts and tribunals in resolving issues in consumer law.
6 Analyse the effectiveness of non-legal measures in achieving justice for consumers.
7 Analyse the remedies open to consumers when companies breach consumer law.
8 Assess the effectiveness of the law in protecting the rights of individual consumers and society.