Are businesses legally required to treat you fairly?

In your everyday life, the businesses you deal with are required by law to treat you fairly, right? This is, after all, the land of the ‘fair go’.

It’s a reasonable assumption, and one shared by the most Aussies if the latest data from consumer group CHOICE is anything to go by.

A CHOICE Consumer Pulse survey found seven out of 10 people (72 per cent) believe businesses in Australia are required by law to act fairly in their dealings with consumers.

But CHOICE says the reality is that far too many businesses are taking advantage of customers through unfair trading practices.

They say consumer law has not kept up with community expectations, which has allowed the proliferation of many dishonest and sometimes even harmful practices.

Law not what you think

The survey showed there was a huge discrepancy between what people think consumer law should protect us from, and what it actually does.

CHOICE cited examples such as charging for extended warranties that give no extra protection, charging customers different prices based on their personal data profiles and making it extremely difficult to cancel subscription services – all practices that are currently perfectly legal in Australia.

Sixty-nine per cent of people mistakenly believe Australian businesses face penalties if they’ve been found to have acted unfairly, despite no legal requirement for them to do so.

And the vast majority of respondents found the trading practices used as examples were unfair. Eighty-four per cent said useless extended warranties were unfair, 89 per cent said charging different customers different prices based on their data was discriminatory and 90 per cent did not agree with making it difficult to cancel subscriptions.

The survey questioned 1087 households, with quotas applied to age groups, genders and geographic locations to ensure all states and territories were represented, as well as both urban and rural areas.

It seems all Australians, regardless of who or where they are, want unfair business practices punished.

What needs to be done?

CHOICE has made a joint submission, along with the Consumer Policy Research Centre (CPRC), to the government’s unfair trading consultation process.

It wants the three previously mentioned practices made illegal and a public ‘blacklist’ of unfair trade practices to be managed by regulators and subject to continuous community consultation.

A ban on any particular trade practice should be economy-wide, and no exceptions should be carved out for certain industries. CHOICE says consumers should also be able to seek penalties or compensation from businesses that breach these bans.

Alex Soderlund, CHOICE senior policy and campaigns adviser, says the changes being sought would fill policy holes that have existed for years and have been effectively dealt with in other countries.

“There are a number of gaps in the consumer law when it comes to protecting people from unfair business practices,” he says.

“These gaps leave consumers in Australia vulnerable to all kinds of unfair treatment.

“It’s time for the law to catch up to community expectations. Seven in 10 people believe businesses are already required to act fairly towards consumers.

“Making unfair business practices illegal is a necessary step to update Australia’s consumer law, protect consumers from harm and promote healthy competition.”

Indeed, there are laws requiring that businesses treat customers fairly in other advanced economies including the US, UK and the European Union.

Erin Turner, CPRC CEO, says the lack of similar laws here is putting the entire Australian economy at a disadvantage, not just consumers.

“Australians are missing out on protections that consumers in other countries have benefitted from for decades. We need laws to effectively call out and restrict unfair practices,” she says.

“This law will protect Australians and give certainty to businesses, fostering a healthier marketplace that doesn’t reward or give competitive advantage to those businesses who exploit or manipulate consumers.”

Can you think of any other unfair trading practices that should be looked at? Are there businesses that are particularly bad at this? Let us know in the comments section below.

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