Consumer Action is a not-for-profit, independent community organisation, focused on advancing the interests of consumers. We advocate for more equitable outcomes for consumers, particularly those who are disadvantaged and vulnerable.
Consumer Action provides free legal advice and representation to vulnerable and disadvantaged consumers across Victoria, and is the largest specialist consumer legal practice in Australia. We operate MoneyHelp, a not-for-profit financial counselling service that provides free, confidential and independent financial advice to Victorians experiencing financial difficulty. Consumer Action is also a nationally-recognised and influential policy and research body, pursuing a law reform agenda across a range of important consumer issues at a governmental level, in the media, and in the community directly.
Consumer Action’s Policy and Campaigns Practice
In line with Consumer Action’s strategic plan for 2011-14, our policy and campaign work integrates with our casework, identifies issues from casework and other sources that contribute to consumer problems, and develops responses.
The policy and campaign practice works in these areas in a number of ways, including:
- Ensuring the consumer interest is recognised and represented in policy debates that impact on the consumer interest;
- Representing an effective and credible voice for consumers, particularly disadvantaged and vulnerable consumers, in media and other forums;
- Bringing about change in laws, regulation, and industry practices, in the consumer interest;
- Contributing to the body of knowledge of consumer issues and laws;
- Developing strategic partnerships, including alliances beyond “traditional” stakeholders; and
- Building capacity within the consumer movement.
Prioritising Policy Issues and Campaigns
Consumer Action recognises that there is a vast range of issues that impact consumers, and that we must prioritise the issues on which we work to ensure that our resources are used strategically, efficiently and effectively for the benefit of consumers. Our prioritisation considers the following questions:
- Does the issue have a significant impact on disadvantaged and vulnerable consumers?
- Does the issue impact on consumers as a whole, for example market failures or lack of competition?
- Has the issue arisen out of our casework practice?
- Is there a current opportunity that impacts our ability to effect change? (e.g. a government inquiry, significant public attention)
- Do we have the skills and strengths to effect change?
- Are there other organisations working on the issue? (consider opportunities for effective collaboration and, conversely, avoiding duplication)
During 2013-14, Consumer Action will:
- focus on five campaign areas;
- retain enough capacity to identify and respond to emerging problem products and practices from our casework;
- focus our policy activities around the priority areas.
By campaign, we mean a coherent and planned series of actions, designed to achieve an overall aim and objectives
1) Stop the Rip Offs – building the case for unfair trading prohibitions
High pressure sales practices are designed to get people to buy products they don’t want, don’t need, and can’t afford. In the worst cases, consumers are deliberately misled, and some even sign up to high cost financing to pay for the product. We believe these are unfair trading practices, where people feel, or are, “ripped off”, and should be outlawed.
The experience of our clients and recent case law indicates that the protections under the Australian Consumer Law may not adequately protect consumers against unfair practices. We believe consumers deserve a fair go, and that’s why we will campaign for a change in the law for a new “unfair trading practices” prohibition to give consumers real protection from unaffordable, unnecessary and unwanted products and traders.
2) Slippery slopes and dodgy dealings—consumer leases
Financial inclusion is not only about access to financial services, but protection from exploitative products that are inappropriate to consumers’ needs. The worst forms of consumer leases target high cost credit at consumers excluded from mainstream finance, and contribute to financial hardship and chronic debt. We will campaign for real reforms in this area, ensuring the real costs are disclosed, bad marketing practices are exposed, and unfair contract terms stamped out.
3) Power for People—essential service vs market commodity
Energy bills form a disproportionately high slice of the outgoings of low income and vulnerable consumers. Those who are experiencing financial hardship on multiple fronts are likely to find their outstanding utility debts passed on to debt recovery agencies, who are then effectively pursuing unrecoverable debt without the utility company being associated with this often dubious practice. Energy retailers, as providers of an essential service, need a social licence to operate, and must consider the needs of all consumers, particularly those with a limited and in some cases declining capacity to pay, in their business models. That’s why Consumer Action will seek commitments from retailers to adopt best practice on early intervention and reform their approaches to consumers experiencing long term financial hardship, and ensure that as a bottom line, they will deliver Power to People, no matter their personal circumstance.
We will also engage public support for our efforts to secure a change to the National Energy Retail Rules to end the current industry practice of tariff variation within fixed term contracts, because we believe that Fixed Means Fixed. We will continue to publish research on the overall energy market design, drawing on Australia’s experience with current mass-market design as well as international experiences with new technologies and pricing regimes that benefit consumers. Climate change presents significant challenges for all people, with social impacts likely to affect vulnerable consumers and communities most severely. This is particularly the case for those living in poor quality private homes or rental accommodation where there is little scope to make improvements that those with higher levels of disposable income have access to.
We will take into consideration the need for policy and programs to tackle the disproportionately higher bills for essential services faced by low income households as a result of climate change and work with partners to deliver relief through assistance to become more energy and water efficient no matter where they live.
4) Profiting from Poverty—making a buck from bad luck
Low-income debtors often get the worst deal when it comes to dealing with debt—inaccessible or weak hardship assistance, particularly for those in long-term hardship; misleading or severe debt collection practices; default judgments and harsh debt enforcement; inappropriate bankruptcy or debt agreements.
There are also more and more businesses seeking to profit from those in financial difficulty, including debt consolidation, credit repair and ‘budgeting’ services. We will expose these new business models and campaign to ensure low-income debtors have the necessary protections, advocacy and support to ensure that they are not denied their dignity.
5) Driving change—effective motor vehicle dispute resolution
Many of the cases we are asked for advice on relate to second hand cars, the traders who sell or lease them, and the credit agencies who provide loans or leases. Going to court is intimidating for most consumers, and almost always too expensive. That’s why we need a fit for purpose motor vehicle dispute resolution forum that is effective, efficient, accessible and affordable, and enables consumers to overcome the evidence barriers that currently exist in the Australian Consumer Law consumer guarantee provisions.
Emerging issues (mini-campaigns on problem market practices)
We regularly identify emerging issues from our casework (legal practice and financial counselling) services. From these issues, we will undertake targeted interventions aimed at addressing consumer product or market practice problems arising from these emerging issues. Activities might include:
- issuing warnings to consumers through the media and our website;
- providing public information about trader conduct; and
- making complaints to consumer regulators.
Problem products include retirement villages (eg deferred management fees) and funeral insurance policies. Problem practices include credit card marketing which can contribute to the problem of unserviceable debts, entering into contracts online where consumer protections are less clear in law or absent (offshore providers), and high pressure in-home sales (eg education software, timeshare).
While we will ensure we remain responsive to consumer policy issues and debates as they arise, we will retain our focus on the following priority areas during 2013-14:
1) Consumer protection and competition
- Effectiveness of consumer guarantees
- Implementation of general fair trading laws, such as unfair contract terms
- Creation of Standards in areas relevant to consumer protection
- Effective operation of competition, particularly on the demand side of markets
2) Consumer credit and financial services
- Consumer credit and credit reporting reforms
- Consumer credit and financial service protections avoidance
- Monitor implementation of short term consumer credit reforms (payday lending) and advocate for further reform where the new laws provide inadequate protection for disadvantaged consumers
- Insurance, particularly unfair terms and problematic policies (consumer credit insurance, funeral insurance)
- Ensure consumer interests are prominently considered in any review of the financial services system
- Ability of consumers to engage in retail energy competition
- Pricing policies that benefit consumers
- Services to facilitate demand management
- Access to concessions
- Household water prices and services
4) Financial inclusion and difficulty
- Access to appropriate and affordable products and services
- Implementation of and access to hardship initiatives including long term hardship
- Debt agreements, credit repair and bankruptcy
- Debt collection and asset protection for low-income debtors
- Promotion and support of, and access to, financial counselling
5) Effective consumer dispute resolution
- Access to and effectiveness of industry internal dispute-resolution processes
- Access to and effectiveness of industry external dispute resolution (EDR) schemes
- Expanding industry EDR schemes to new market sectors
- Ensuring consumers are not disadvantaged by mediation and ADR procedures
- Appropriate court and tribunal forums where there are EDR gaps or to facilitate test cases
- Ensuring access to courts and tribunals through appropriate fee waivers for low income and vulnerable consumers