Consumers Flashcards
(121 cards)
1
Q
Indicate 3 reasons why the consumer world is complex
A
Incredible array of choice
Products and contracts have become increasingly complex
Multiple methods to purchase products
2
Q
What is meant by the term laissez faire?
A
Little or no government intervention
3
Q
What is meant by the term caveat emptor?
A
Let the buyer beware
4
Q
Which 1892 case about the advertising of a reward for the failure of a flu remedy, established the elements of a contract such as offer and acceptance?
A
Carlill v Carbolic Smoke Ball Co (1892)
5
Q
What are the elements of a contract?
A
Offer Acceptance Consideration Legally binding intent Capacity to enter a contract
6
Q
Which 1919 case established that agreements between relatives do not generally have a legally binding intent?
A
Balfour v Balfour (1919)
7
Q
Give 2 examples of common contracts which have exclusion clauses. Which case established that exclusion clauses must be made clear to the consumer prior to entering a contract?
A
Insurance Dangerous activities (eg skydiving)
Thornton v Shoe Lane Parking (1971)
8
Q
What are the two types of terms in contracts?
A
- Express - clearly spoken terms
2. Implied - always present in contracts despite not being discussed.
9
Q
Which NSW statute first implied terms into consumer contracts?
Which Federal statute first implied terms into consumer contracts?
Give 3 examples of terms implied into contracts under these Acts
A
The Sale of Goods Act 1923 (NSW)
The Trade Practices Act 1974 (Cth)
Egs:
Goods must be of merchantable quality
Goods must be fit for purpose
Goods must match description
10
Q
Which law now implies terms into consumer contracts?
What are these implied terms now called?
Why was the language changed? Give another example of how the language surrounding implied terms have changed
A
The Australian Consumer Law
Now called Consumer Guarantees
Language simplified to make the law more accessible
Eg: merchantable quality now ‘acceptable quality’
11
Q
Give 3 examples of consumer guarantees
A
Acceptable quality
Fit for purpose
Match description
12
Q
What are the 3 usual remedies for the failure of ensuring the consumer guarantees are met?
A
Refund
Repair
Replacement
13
Q
What are two types of unjust contracts?
A
Unconscionable conduct
Unfair terms in standard form contracts
14
Q
Name 2 cases which have established the principles of unconscionable conduct.
A
Blomley v Ryan
Commercial Bank of Australia v Amadio (1983)
15
Q
Name 2 statutes that define unconscionable conduct and put in place suitable remedies for such behaviour.
A
Contracts Review Act 1980 (NSW)
Australian Consumer Law (Competition and Consumer Act 2010 (Cth))
16
Q
How does the Contracts Review Act 1980 (NSW) define unjust contracts?
A
Behaviour that is unconscionable, harsh or oppressive
17
Q
What is a standard form contract? Give an example. Which law regulates these contracts?
A
Contracts that are standard for all consumers and given on a “take it or leave it” basis. Examples include: airline contracts, electricity contracts, gym memberships. Law: Australian Consumer Law
18
Q
What is the process for dealing with unfair terms in standard form contracts?
A
Consumers may take the matter to court to have the unfair term removed from the contract.
The ACCC may also take businesses to court on behalf of all consumers.
19
Q
Name a business successfully prosecuted by the ACCC in the courts for the unfair terms in their standard form contracts
A
ACCC v Bytecard (2013) - the court ordered that 3 unfair terms be removed and that Bytecard pay half the court costs of the ACCC.
20
Q
Name the case which established the concept of negligence and that businesses have a duty of care to provide products that are free from harm.
A
Donoghue v Stevenson (1932) - “snail in the bottle” case
21
Q
Which Australian case built on the concept of negligence established in Donoghue v Stevenson?
A
Grant v Australian Knitting Mills (1936)
22
Q
Name a contemporary example of negligence in the consumer world.
A
Samaan v KFC (2012) - KFC were found to have been negligent and failed in their duty of care after a young girl suffered severe brain damage from salmonella poisoning. She was awarded $8million in damages.
23
Q
What is meant by unconscionable conduct?
A
Occurs when one party to a contract exploits the vulnerability of the other party. This could be because the victim is impaired in some way or is deceived or threatened by the other party
24
Q
Name 2 cases which demonstrate the willingness of the courts to intervene in cases of unconscionable conduct.
A
Blomley v Ryan (1956) - illiteracy, alcoholism, mental impairment.
Commercial Bank of Australia v Amadio (1983) - English language skills.
25
Which 2 pieces of legislation regulate unjust contracts?
Contracts Review Act 1980 (NSW)
Australian Consumer Law
Both outline the nature of unjust contracts and unconscionable conduct and provide a range of remedies when it is found to have occurred.
26
Name a case where a company has been prosecuted for unconscionable conduct by the ACCC
ACCC v Craftmatic - fined $19800 for conduct when selling beds to the elderly.
27
What is the process of redress and the remedy when unfair terms are found in standard form contracts?
Redress process: Consumers can apply to the courts to...
| Remedy:....have the term removed from the contract.
28
Name a case where the ACCC has prosecuted a company for unfair terms in their standard form contracts.
ACCC v Bytecard (2013). They were forced to remove 3 terms from their contracts.
(This was the first case prosecuted under this new law)
29
Which case established the precedent that manufacturers have a duty of care to provide safe products otherwise they can be found to be negligent?
Donaghue v Stevenson
30
Which Australian case built on the precedent established in Donaghue v Stevenson?
Grant v Australian Knitting Mills (1936)
31
What 4 issues could you discuss with the contemporary issue Technology?
```
E-commerce
Spam
Scams
Mobile phones
You could also do:
Daily deals websites
And, if you're clever, mobile phones
```
32
Which law protects consumers when they buy online from an Australian based business?
The ACL (consumer guarantees)
33
Why is it difficult to protect consumers when they buy online from overseas?
Because the ACL and ACCC have no international jurisdiction and therefore no powers of enforcement. They therefore suggest consumers take a caveat emptor approach.
34
Which international organization can assist consumers when they have dispute with overseas online retailers. What do they do?
Econsumer.
They keep a database of complaints which be investigated by the participating nations' consumer regulatory bodies (ie, ACCC). They can also direct consumers to a mediation service to resolve disputes.
35
How much did consumers spend on online shopping in 2014?
$16billion
36
What non-legal measures can assist consumers when buying online?
Econsumer
ACCC and NSW Fair Trading website have advice for consumers
The media (advice they provide through reports and articles)
37
How much did Australians lose to scams in 2014?
$90million
38
Why is occupational licensing important?
1. Risk of harm if jobs are poorly carried out
| 2. Rely on certain occupations to have minimum standards and must trust that they tell us the correct information.
39
Name an Act which regulates licensing for a particular industry.
Home Building Act 1989 (NSW) - if you want to do builders
Motor Dealers and Repairers Act 2013 (NSW) - if you want to do motor dealers or mechanics
Health Practitioner Regulation National Law 2009 (Cth) - if you want to do doctors
40
Name an issue which highlights a failure of the occupational licensing system
Issue of traveling conmen.
41
What penalties can be enforced for operating without a license or not meeting minimum standards?
Fines of $110,000 (note, this is for builders and car dealers/repairers under their respective Acts) for operating without a license.
License can be revoked. Tradespeople can have theirs revoked by NSW Fair Trading. Doctors can have theirs revoked by the Medical Board of Australia.
42
Which law regulates misleading and deceptive advertising and marketing?
The Australian Consumer Law
43
What kind of conduct is prohibited under the ACL with regard to marketing and advertising?
GENERAL misleading and deceptive conduct - any conduct which may mislead consumers as to the quality or price of a good
SPECIFIC misleading and deceptive conduct - eg bait advertising and was/now pricing.
44
Name 5 penalties that can be implemented under the ACL for misleading and deceptive conduct?
1. Civil Pecuniary Penalty (handed down by the Federal Court) - maximum $1.1m for corporations and $220,000 for individuals
2. Infringement notices (on the spot fines issued by the ACCC)
3. Compliance training
4. Corrective advertising
5. Injunctions
45
Name a case prosecuted by the ACCC in the Federal Court for misleading conduct and the penalty handed down.
ACCC v Coles Supermarkets Australia Pty Ltd (2015) - $2.5m civil pecuniary penalty
46
What are the steps in the redress process?
```
Self help and awareness
Seek assistance from government bodies
Seek assistance from industry organisations
Tribunals
Courts
Non-legal: Media and NGos
```
47
What is the most common reason consumers seek a remedy having purchased a good?
Failure to meet Consumer Guarantees outlined in the ACL (eg acceptable quality, failure to match description, not fit for purpose)
48
What are the most common remedies sought by consumers?
The 3Rs - Replacement, refund, repair
49
Why is self help generally an effective method of resolving consumer disputes?
It is accessible - it is cheap, quick and most consumers achieve the outcome they were after (refund, repair, replacement)
50
Which consumers may have problems accessing suitable remedies through the self help process?
Those from non English speaking backgrounds (according to the Australian Consumer Survey Report undertaken in 2011)
51
Name a SMH article which highlights the difficulties consumers may face in gaining a refund through the self-help process
Big names mislead on warranties (2013) - outlines how stores such as Harvey Norman were deliberately misleading consumers on product warranties by failing to disclose information.
52
What are the steps in the redress process?
```
Self help and awareness
Seek assistance from government bodies
Seek assistance from industry organisations
Tribunals
Courts
Non-legal: Media and NGos
```
53
What is the most common reason consumers seek a remedy having purchased a good?
Failure to meet Consumer Guarantees outlined in the ACL (eg acceptable quality, failure to match description, not fit for purpose)
54
What are the most common remedies sought by consumers?
The 3Rs - Replacement, refund, repair
55
Are these organisations effective??
Yes!
They are highly accessible - they can be contacted in a range of ways (including their own App) and are highly active in social media.
They provide information which targets vulnerable consumer groups - the elderly and non English speakers (they're accessible)
Use any ACCC case to show their ability to prosecute businesses on behalf of consumers (maybe use 2 different cases on 2 different issues, eg, Coles/Bytecard/Craftmatic/ Cotton on Kids)
56
Which consumers may have problems accessing suitable remedies through the self help process?
Those from non English speaking backgrounds (according to the Australian Consumer Survey Report undertaken in 2011)
57
Name a SMH article which highlights the difficulties consumers may face in gaining a refund through the self-help process
Big names mislead on warranties (2013) - outlines how stores such as Harvey Norman were deliberately misleading consumers on product warranties by failing to disclose information.
58
What is a standard form contract?
A contract that is offered to all consumers in the same form on a take-it-or-leave-it basis. It is not negotiated. Examples include mobile phone contracts, electricity contracts, gym contracts. This is NEWLY regulated by the ACL
59
Name 3 government organisations where consumers can seek assistance on gaining knowledge of their rights?
The ACCC (the Australian Competition and Consumer Commission)
NSW Fair Trading
The ASIC (the Australian Securities and Investment Commission)
(You could also say ACMA - the Australian Communications and Media Authority, who regulate the Spam Act and the Do Not Call Register)
60
Name 3 things Government organisations do to assist consumers
Provide free advice for consumers through a range of mediums - their offices, online, telephone
Undertake compliance checks to make sure businesses comply with the law (Fair Trading in particular undertook almost 9000 compliance checks in 2013/14)
Prosecute businesses who do not comply with the ACL and other consumer laws.
61
What are the 2 processes the NCAT offers to resolve disputes?
```
Conciliation
Tribunal decision (this is essentially arbitration)
```
62
Is NCAT effective?
Yes!
They are highly accessible costing less than $100 for most applications ($47 for disputes worth less than $10,000, $97 for disputes worth between $10,000-30,000)
The conciliation process allows consumers and businesses arrive at their own resolution
Their decisions are legally binding - however, can be difficult to enforce which may force consumers to go to court
63
What is the name of the telecommunications industry ombudsman?
The Telecommunications Industry Ombudsman (haha -trick question!)
64
How many complaints did the TIO receive in 2014 about Telcos?
Approximately 30,000 per quarter, or 120,000 over the year (this is a declining figure)
65
What is the role of the media in protecting consumers
Educate on rights, eg The Checkout, A Current Affair - A New Low (Travelling Conmen)
Highlight failures of the law (eg 4 Corners, April 2015 - Game of Loans)
Allow consumers to have a voice through social media (eg Vodafail)
66
Name 4 remedies available to consumers under the Contracts Review Act 1980 (NSW) when they are subjected to unjust contracts
The courts may:
Rescind the contract
Vary the contract
Award damages
Put in place injunctions (to stop certain behaviours)
(NOTE: these are the same in the ACL for unconscionable conduct)
67
What are the 2 processes they offer to resolve disputes?
```
Conciliation
Tribunal decision (this is essentially arbitration)
```
68
Are they effective?
Yes!
They are highly accessible costing less than $100 for most applications ($47 for disputes worth less than $10,000, $97 for disputes worth between $10,000-30,000)
69
What is the last option solution for consumers who wish to resolve disputes with businesses
Are they effective?
The courts
Yes - they make final legally enforceable decisions
Yes - they can intervene in a range of cases to protect consumers both as individuals (eg Blomley v Ryan and Amadio) and on behalf of society (eg Coles, Bytecard, etc)
No - they are expensive and time consuming
70
Name 3 NGOs who can assist consumers in the resolution of disputes
Choice
Financial Rights Legal Centre (debt and credit assistance)
Australian Communications Consumer Action Network (ACCAN)
71
Name 4 remedies available to consumers under the Contracts Review Act 1980 (NSW) when they are subjected to unjust contracts
The courts may:
Rescind the contract
Vary the contract
Award damages
Put in place injunctions (to stop certain behaviours)
(NOTE: these are the same in the ACL for unconscionable conduct)
72
Name remedies available under the ACL for misleading and deceptive conduct/product safety
Infringement notices, civil pecuniary penalties, public warning notices, compliance training
73
Which law regulates online buying from Australian retailers?
The ACL (all the same rules apply - Consumer guarantees, 3Rs, suitable redress process
74
Name 3 non-legal measures which are important in protecting consumers against scams
ACCC's ScamWatch website
Fraud Week
Media - eg, ABC's 7:30's Death and debt spark calls for national response to online scams (2013)
75
What is the name of the intergovernmental portal established to deal with complaints about international online consumer transactions?
Econsumer
76
Is Econsumer an effective method for resolving international disputes
Although it provide a cheap service, their database relies on governmental consumer organisations responding to the database. Although they provide links to mediators who may help consumers, the resolutions arrived at are difficult to enforce. They would also not seem to be well known as they only receive 25000 complaints, on average, a year
77
Name a SMH article which highlights the scams consumers can be subjected to when buying online
Scammers mimic online retailers (June 2013)
78
Approximately how much do Australians spend every year through online sales?
$16.6 billion in 2014
79
How much did Australians lose to scams in 2014?
$81 million (this figure was released by the ACCC on 18/5/15)
80
Name 3 types of scams Australians are subjected to
Romance and dating scams
Advanced fee for service scams (eg the Microsoft phone scam)
Fake lotteries
81
Which laws prohibit scams?
ACL for misleading and deceptive conduct
The Crimes Act 1900 (NSW) and the Criminal Code Act 1995 (Cth) - most scams are fraud - a serious crime. Both of these Acts have a 10 year term of imprisonment as their maximum penalty
82
Why are scams difficult to prosecute?
The ACCC says that due to the 'fly by night' nature of scammers and their international nature, they 'may not be able to take action or enforce Australian court orders'
83
Name 3 non-legal measures which are important in protecting consumers against scams
ACCC's ScamWatch website
Fraud Week
Media - eg, ABC's 7:30's Death and debt spark calls for national response to online scams (2013)
84
Which Act regulates the use of electronic messages to market information to consumers?
The Spam Act 2003 (Cth)
85
Which government organisation monitors the Spam Act?
The Australian Communications and Media Authority (ACMA)
86
What are the possible penalties for sending spam?
Formal warnings, infringement notices, civil pecuniary penalties (which can be implemented at a maximum of $1.7million/day!
87
What is the biggest penalty handed down by ACMA through an infringement notice for spam?
A $165,000 penalty to GraysOnline in 2013
88
Is the Spam Act effective?
Yes, the Spam Act is generally highly effective in reducing levels of spam from Australian-based companies. However, ACMA has no power to prosecute companies who said spam from overseas
89
In what 2 ways does the ACL regulate unsolicited sales (ie direct marketing/door-to-door sales/telemarketing)?
1. Consumer Guarantees are still enforced
2. Consumers must be given a 10 day cooling off period where they can withdraw from the contractual agreement with no penalty. (NOTE: this is NEW to the ACL - it was not found in the Trade Practices Act 1974 (Cth). Door-to-door sales were previously covered by state laws
90
Which Act was introduced to regulate telemarketing calls in Australia?
The Do Not Call Register Act 2006 (Cth)
91
Who regulates and monitors the Do Not Call Register (DNCR)?
The Australian Communication and Media Authority (ACMA)
92
What are the possible penalties for calling numbers on the Do Not Call Register (DNCR)?
Formal warnings, infringement notices, civil pecuniary penalties handed down by the Federal Court
93
Name a case where the ACMA has issued a infringement notice
Zone Telecom (infringement notice of $20,400) in 2013
94
Is the Do Not Call Register effective?
Yes.
The number of phone numbers on the register continues to increase (currently 10million)
In May of 2015, the time a number stayed on the register became permanent (it increased from 3 years to 8 years in 2013, but is now permanent)
ACMA statistics indicate 90% of people on the DNCR receive no unsolicited sales calls once on the register.
95
What non-legal measures are in place to assist in protecting consumers from telemarketing calls?
The Direct Marketing Industry Code of Conduct which was established by ADMA (the Association for Data Driven Marketing and Advertising). Although not a legal code, it has assisted in providing guidelines for appropriate behaviour in telemarketing
96
Give 2 examples of online group buying (daily deals) sites
Catch of the Day, Living Social, Spreets
97
How much did Australians spend on daily deals sites in 2013?
Approximately $500m (about 10 million vouchers)
98
What legal measures are in place to ensure consumers are protected when they buy on daily deal websites?
They are protected under the Australian Consumer Law. This means consumer guarantees must be met and businesses must not mislead or deceive consumers
99
Name a case where a online group buying site has been prosecuted for misleading and deceptive conduct
Spreets were handed a $600,000 civil pecuniary penalty in 2015 for misleading and deceptive conduct in relation to their conditions of sale. (ACCC v Spreets)
Scoopon were handed a $1m civil pecuniary penalty in 2013 for misleading and deceptive conduct (ACCC v Scoopon)
100
What non-legal measures are in place to assist in the protection of consumers when they buy on daily deals sites?
The ADMA (Association of Data Driven Marketing and Advertising) established a Code of Practice for Group Buying in 2013. Although not legally enforceable, it has made a significant differences in the number of complaints received by NSW Fair Trading about online group buying deals
101
Are the measures in place to protect consumers when they buy from daily deal websites effective?
Although there have been numerous cases where businesses have been able to meet the demand for their products (Havianas in 2012) or the conditions are often restrictive about the use of vouchers, since the implementaion of the Code of Practice for Group Buying by ADMA, there has been a decline in complaints (as reported by NSW Fair Trading). The case of ACCC v Spreets also highlights the effectiveness of the law in this area.
102
What are the 2 types of product certification (or safety standards)?
Mandatory standards and Industry Standards (which are voluntary)
103
Which statute regulates mandatory safety standards?
The Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth))
104
Under the ACL, who is responsible for establishing a mandatory standard for a good?
The relevant Federal government minister who is responsible for consumer affairs.
105
Name 3 products which have mandatory safety standards
Children's cots, children's strollers, bike helmets.
106
Which organisation 'constructs' the standards established in Australia?
Name an example of an organisation who can test products to ensure they meet the relevant mandatory standard
Standards Australia
| Five Ticks StandardMark
107
Who is responsible for enforcing Product Safety laws? What are the possible penalties under the ACL for selling products that do not meet the mandatory standard?
The ACCC and State-based Fair Trading departments (ie NSW Fair Trading)
Public warning notices, Infringement notices, civil pecuniary penalties (maximum of $1.1m for corporations and $220,000 for individuals)
108
Name a case prosecuted by the ACCC for a company which sold products which failed to comply with mandatory standards
ACCC v Cotton on Kids (2012) - handed a civil pecuniary penalty of $1million for selling children's pyjamas which did not meet the mandatory standard regarding flammability.
109
Who has responsibility for establishing bans on products?
The relevant state or federal consumer affairs minister (these can be done at a state level which can lead to different states banning different products)
110
What are the 2 types of bans which can be placed on consumer products?
Permanent bans and Interim bans
111
Name 3 products that have permanent bans in Australia
Lead wick candles, novelty cigarettes, baby dummies with unsafe decorative features (and fire footbags!)
112
Name a product which has recently given a interim ban. How long does an interim ban last?
Synthetic drugs (this was a NSW ban) in 2013. Interim bans last for 60 days
113
What is the maximum penalty under the ACL for selling products which are banned (either permanently or in the interim)?
$1.1million for corporations and $220,000 for individuals
114
Under the ACL, what are the 2 types of recalls which can take place of consumer goods? Which is the most common?
```
Compulsory recalls (products recalled by the ACCC)
Voluntary recalls (products recalled by the company)
Voluntary recalls are the most common
```
115
Name 3 products which have been recalled in the last few years.
Samsung washing machines (recalled from 2013 to 2015)
Cars containing Takata airbags (2015)
VW cars (2013)
Certain brands of jeans including those sold by Just Jeans (2014)
116
What is the penalty for a business which does not report a safety incident to the relevant minister within 48 hours of an incident?
$16,650
117
What is the name of the Act which regulates credit in Australia?
The National Consumer Credit Protection Act 2009 (Cth)
118
Name 4 features of the National Consumer Credit Protection Act 2009 (Cth)
1. Credit providers must be licensed
2. Responsible lending conduct
3. Must belong to an External Dispute Resolution (EDR) service
4. Monitored and enforced by ASIC
119
Name an example of an External Dispute Resolution service for credit providers.
Financial Ombudsman Service (FOS)
120
Name a media article which highlights the problems associated with pay day lenders
Game of Loans (ABC 4 Corners, 2015)
121
Who do pay day lenders target?
Vulnerable consumers such as those from low socio-economic backgrounds
