Consumer Law: Credits and Technology

The prevalent issues of credit and technology significantly affect the consumers of the 21st century. Whilst technology continues to evolve as more credit options become available the need for protection remains in demand for further amendments of statutory legislation to be undertaken as to allow sufficient protection of consumers. The Competition and Consumers Act 2010 (CCA) is legislation that provides protection for consumers regarding the contemporary issues of technology and credit, but the law is breached continually by businesses. Thus, highlighting the need for more protection for vulnerable consumers in 2019 which is in more demand than ever before.

Credit is an issue that is present in today’s society and has consumer protection but as it develops more protection and amendments to the law could be made. The 21st century has brought about a cashless society through the use of alternative payment methods such as credit cards, eftpos and wallet apps on phones. As of 2008 the Council of Australian Governments stated that there should be a transfer of consumer regulation powers from the states to the commonwealth resulting in amendments to the National Consumer Credit Protection Act 2009 (Cth). The amendment allowed for a uniform law for regulation of credit leading to stability in the credit sector. Credit cards allows someone to purchase without spending their own funds and paying back banks later. Many issues have resulted from this due to businesses charging excessive surchargers to customers as they try to deter people from using credit cards and instead use their own money. The Australian Competition and Consumer Commission (ACCC) took Europcar to court as they breached the Competition and Consumer Act 2010. The allegations were that Europcar customers who used a Visa or Mastercard credit card were charged fees above what it cost the company to accept the payment. Europcar was notified in July 2017 by its bank to reduce its surchargers, however they didn’t accept it and continued to breach the law[KD1] . Similarly, Fitness First Australia breached the law and received a penalty of $12,600 after the ACCC imposed an infringement due to excessive surchargers. Whilst companies are allowed to impose surchargers, they must not exceed the cost of acceptance for any transaction. Through the Europcar findings and the Fitness First case it demonstrates how even though the Competition and Consumer Act 2010 is present, businesses still breach the law. Both cases emphasise how a legal response by the ACCC took these companies to court rather than an ordinary citizen who is vulnerable as they do not earn the money these companies do. The ACCC is an example how consumers of the 21st century can be protected especially as they can fight for the rights of consumers. [KD2]

In 2019 the need for consumer protection is clearly needed. The National Credit Code (and Credit Law Toolkit) is supposed to guarantee standardisation and requires credit information to be provided in an easy to understand format. Industries such as banks, credit unions and finance companies are required to: inform consumers of their rights and obligations as well as disclose all relevant information about the credit arrangement via written contract which include interest rates, fees and commission. This Legal response helps to protect consumers of the 21st century although specific companies still defy the law and breach it. The federal court ordered Chrisco Hampers Australia Ltd to pay a pecuniary fine of $200,000 as a result of them making false or misleading representation that customers couldn’t cancel a lay-by agreement after making the final payment. The court found Chrisco guilty for contravening the Australian Consumer Law (ACL) through the misleading and false information to consumers about the lay-by agreement. This highlights how the law protects consumers as the company was fined however, for a large corporation the $200,000 penalty does not act as a deterrence as they continue to breach consumer law. The consumer law supports customers in the 21st century especially with some overseas purchasing. It is difficult to enforce law on an international scale but the ACCC demonstrate how justice can be achieved. The federal court ordered PT Garuda Indonesia to pay a penalty of $19 million due to them colluding on fees and surchargers for ai freight (30 May 2019). The court found that between 2003 and 2006 the company had fixed the price of security and fuel surchargers as well as customer fees. This led to them being fined $15 million. The further $4 million was as a result of imposition and level of insurance and fuel surchargers from Hong Kong. The ACCC stated that this case was one of the worst examples of price fixing they had seen. This demonstrates the dominance large companies believe they have over consumers as they continually breach the law. Thus, emphasising the need for more consumer protection in 2019 as the law continues to be breached and large companies believe they have significant power over the consumers in the 21st century.

The issue with technology regarding consumer law is becoming harder to manage due to the continual development of technology in the 21st century. The complexity between sellers and consumers is constantly changing as well as the global marketplace. Technologies in the 21st century include electronic service delivery, online shopping, telemarketing and online reservation schemes for accommodation and entertainment. The use of the global marketplace makes it difficult for Australian law as it has no international jurisdiction. Some effective legal responses in regard to technology include part 20 of the Telecommunication Act 1997 (cth) which gives the ACCC authority to administer the rules. [KD3] Whilst this power is limited, its inclusion in the legislation highlights how they recognise that technology is continually changing and therefore, needing a corporation to specifically target these issues relating to consumers. Scams are a problem with technology which is readily happening as well as being difficult to regulate and find who it is. [KD4] The ACCC’s scam report in 2017 highlights that indigenous people loss a near total of $1.7 million due to online scams. Some scams are also done through apps such as Facebook. Davin received a private message on facebook from a ‘Facebook Freedom Lottery’ claiming he had won some money. Davin’s cousin also won some money and had told him how he had collected the money and it was legitimate. To receive the money he first had to pay a fee of $250, once paid he would receive his money. As Davin continued to send money, he eventually realised it was a scam and lost $1500 and handed a whole lot of personal information[KD5] . This demonstrates how easy it is for people to scam others through simple apps such as Facebook emphasising the need for consumer protection in 2019. Furthermore, larger companies also have been targeted and hacked. The Marriot guest data was hacked, and it exposed the data of over 500 million people. The hackers also exposed passport numbers of some guests as well. This case evidences how the law isn’t successful in managing technology especially internationally as the hackers still haven’t been identified, making the everyday consumer vulnerable by using technology. Thus, technological development helps to highlight the need for consumer protection in the 21st century as it is difficult to identify hackers in the online world and for justice to be served to those who do wrong especially over international waters.

In addition[KD6] , technology also is a product, the buying of phones, tablets and computers is another way the consumer law needs to protect vulnerable consumers of 2019. The buying of these products is protected under the Competition and Consumer Act 2010 although companies such as Apple still breach the law which highlights the need for more protection for the vulnerable consumer as an adequate amount isn’t provided by the law. Apple were made to pay $9 million in penalties as a result of them providing false or misleading information under the Australian Consumer Law. The ACCC took action against Apple after an error which disabled consumers phones as a result of and ‘iOS’ update. They claimed anyone with this error were not entitled to a remedy if the device had been repaired by a third party. The court came to a final decision that if the device was repaired by a third party, that Apple could not disallow the consumer from getting remedies from Apple. This breach of legislation demonstrates how the law can easily be manipulated for a large company to rip off [KD7] vulnerable consumers, who do not have the same earning as Apple. Due to the law allowing the ACCC to have some legislative power, vulnerable consumers have some protection as this organisation ensures consumer rights are met which is demonstrated in the Apple case. The legislation fails to protect consumers in 2019 as digital products such as e-books and digital music are not protected by the law. The legislation states that consumers are ‘entitled to receive goods of acceptable quality and fit for their purposes” but, how does digital products fit into this is debatable and the law hasn’t been amended to include digital products. Technology as a product also includes fitness technologies such as watches. Fitbit Australia were forced to amend their consumer information as they did align with the rights presented in the ACL. Fitbit communicated to customers that its warranty for their products was only available for a year and any faulty products would only be replaced for the rest of the year. Though retailers must provide a remedy for faulty goods to comply with the ACL. After many complaints Fitbit acknowledged they were wrong and misrepresented what customers are entitled to. Therefore, the Competition and Consumer Act 2010 and the ACCC protects consumers against false and misleading information however, the protection against digital products evidences the need for further reform to law to keep up with evolving technologies to be able to adequately protect vulnerable consumers in 2019.

Thus, the need for consumer protection is in high demand due to credit and technology evolving leading to the legislation needing reform to be able to adequately protect consumers. However, the ACCC helps to protect consumers rights as they help to enforce the ACL and impose infringements/fines though they are only somewhat effective as the fines are insufficient in deterring large companies.