Australia’s Consumer Confidence Crisis
Strawberries in WA. Wikimedia Commons, used without permission.
In December 2023, The Commonwealth Government released the third iteration of the Australian Consumer Survey (ACS), a national survey of consumers and businesses designed to assess the effectiveness of Australian Consumer Law (ACL) and drive policy change or reform where necessary. [1] The report gathers evidence into the experiences of consumers and businesses with ACL, including their awareness, knowledge and perceptions of their rights and responsibilities. [2]
The most recent survey revealed that consumer awareness of ACL has reached an all-time high of 92% – the highest level recorded since consumer law was introduced under the Competition and Consumer Act 2010. [3] However, despite record-high awareness, the report reveals a significant gap in most consumers’ depth of knowledge regarding their legal rights and guarantees. This lack of comprehensive understanding has diminished consumer confidence, spurring a surge in reports to the Australian Competition and Consumer Commission (ACCC) while contributing to a growing trend of non-compliance amongst businesses with ACL.
Awareness v Depth of Knowledge
Of the majority of Australians aware of consumer law, the 2023 survey indicates that just 28% of those consumers have a very good or excellent understanding of their consumer rights, leaving the majority of Australians with a moderate or lower level of knowledge of their entitlements as a consumer. [4] When businesses were asked how well-informed they perceive Australian consumers to be, just 63% felt Australians were well-informed of their basic consumer rights (down from 74% in 2016). [5] While the majority of Australians are aware of consumer protection laws, a concerning amount of consumers lack the requisite knowledge or confidence to assert their rights to a business.
As a result, reports to the ACCC concerning consumer guarantees have soared from consumers either unsure of their entitlements, or that feel they have been exploited. Last year alone, the ACCC received over 28,000 reports and inquiries from concerned consumers, representing a significant proportion of the 98,000 total contacts received by the ACCC. [6] In response to the surge of reporting, ACCC Deputy Chair Catriona Lowe urged Australians to take better care and advantage of their consumer guarantees, conceding that ‘we know many people do not feel sufficiently knowledgeable or confident to challenge a business when they believe something they have purchased isn’t of acceptable quality’, but asserted to Australians that ‘when you buy a product or service from a business you have automatic rights and guarantees’. [7] Ms Lowe offered several resources to raise consumer awareness and provided statements that consumers may have experienced that are misleading or deceptive. Whilst providing self-help resources to consumers is necessary, the ACCC is limited in its ability to help against exploitation. Currently, the ACCC can only intervene in situations where ‘a retailer or manufacturer systematically misleads consumers about their rights’; [8] an issue that has exacerbated poor compliance among businesses and simultaneously prompted pleas for law reform by the ACCC.
The ACCC’s call for reform
Currently in Australia, the consumer guarantee regime is a private right enforceable only by consumers. [9] The ACCC and other consumer protection organisations cannot pursue a business for non-compliance with consumer guarantees, they can only take action in cases of false or misleading representations made to consumers about their guarantees. [10] Since non-compliance with ACL is not technically illegal, businesses have become increasingly non-compliant with the consumer guarantee regime. This has directly contributed to a loss of confidence amongst consumers regarding what their entitlements actually are. In the recent ACS, just 55% of businesses believe the Commonwealth does enough to ensure compliance with ACL, and alarmingly, only 58% believe they would be detected for non-compliance with consumer law. [11] These figures have been gradually increasing since 2016, which confirms there is growing confidence among businesses who feel they can safely ignore ACL and avoid detection.
As a result of these trends, there has been a resurgence of calls by the ACCC to reform consumer law so that the failure of businesses to honour consumer guarantees becomes a contravention that incurs penalties. [12] ACCC Chair Gina Cass-Gottlieb stressed ‘there is a need to consider what more should be done’ and that ‘the law should be strengthened, access to justice needs to be improved, and a culture of compliance is essential’. [13] In the meantime, the only form of recourse currently available to the ACCC is our inept friend, the courtroom, which can only assist in situations of systematic misinformation, such as the recent ACCC allegations against Mosaic Brands Limited for consistent false representations regarding delivery times and refund eligibility. [14] To curb the growing inconsistency among consumers as to what their rights and entitlements are under ACL, increased regulatory power and greater enforcement resources are necessary reforms that should be afforded to consumer protection agencies like the ACCC. Such reform can both assist in enhancing consumer knowledge and confidence, whilst concurrently confronting the growing number of non-compliant businesses in Australia.
[1] Australian Consumer Survey 2023 (Final Report, 15 December 2023) 4 (‘ACS’).
[2] Australian Consumer Law, Australian Consumer Survey (Web Page) <https://consumer.gov.au/consultations-and-reviews/australian-consumer-survey>.
[3] Competition and Consumer Act 2010 (Cth).
[4] ACS (n 1) 20.
[5] Ibid 8.
[6] Stephen Scourfield, ‘What are your rights under law?’, The West Australian (online, 14 August 2024) <https://editions.thewest.com.au/ccidist-ws/wan/wan_west-australian/issues/7463/OPS/GR94MRMIH.1+GGV4MRQFB.1.html>.
[7] ACCC, ‘Broken but out of warranty? Your consumer guarantee rights may still apply’ (Media Release 02/24, 18 January 2024).
[8] ACCC, Consumer Guarantees, a guide for consumers, (Guide, July 2021) 13.
[9] ACCC (n 7).
[10] Gilbert and Tobin, ACCC seeks consumer guarantees reform whilst stopping a Mosaic of delay (Web Page, 11 March 2024) <https://www.gtlaw.com.au/knowledge/accc-seeks-consumer-guarantees-reform-whilst-stopping-mosaic-delay>.
[11] ACS (n 1) 8, 104.
[12] Gilbert and Tobin (n 10).
[13] Ibid.
[14] ACCC, ‘Noni B, Rivers, Katies owner Mosaic Brands in court for allegedly failing to meet advertised delivery times’ (Media Release 26/24, 4 March 2024).