Sydney, 15th March, 2018.
Every year World Consumer Rights Day is celebrated on 15 March. To mark the occasion this year two members of the CSA Executive Committee, John Furbank and Elaine Attwood, travelled to Sydney to attend the 2018 National Consumer Congress - hosted by the Australian Competition and Consumer Commission (ACCC).
This year the congress featured important issues impacting consumers in a world of continually evolving markets. The day featured familiar sessions on: product safety, financial services and credit reform and also introduced delegates to: the power of algorithms to manipulate data, the challenges facing consumers with retirement villages and the ‘Internet of Things’ - a network of internet-connected objects able to collect and exchange data using embedded sensors.
The meeting was opened by Delia Rickard, Deputy Chair, ACCC. Delegates were officially welcomed by the Hon Matthew Keen MP, NSW Minister for Innovation and Better Regulation, who stated that trust is the foundation of markets and products.
Rod Sims, Chairman, ACCC said 2018 being a big year for product safety. There are 66 compulsory safety standards now in place. Other important issues are the general safety provision in the Australian Consumer Law (ACL) and increased penalties for breaches of the ACL.
The first premise of the general safety provision is ‘do no harm’ - people expect products to be safe and the ACCC needs to be proactive rather than reactive. There will be some resistance to this provision and ACCC needs to work out how a business can comply, but it shouldn’t impose greater cost to business as it is in their interests as well. The UK, EC, Canada and Singapore all have such provisions - it creates trust.
Consumer law has been the ‘poor cousin’ to competition law and there is a Bill before parliament to address raising ACL penalties to match those of competition, e.g. $10,000,000 or 10% of turnover.
Better compliance and enforcement are needed with compensation in financial services, mortgage interest rates (A paper released on 15 March), access to data, (with the ACCC the lead regulator), and the digital platforms inquiry. A list of the ACCC product safety priorities was made available.
Minister the Hon. Michael Sukkar, MP, Minister to the Commonwealth Treasurer spoke of the need to be continually seeking consumer views, and said the ACL is strong and effective. Planning is taking place with regard to data and consumers rights in relation to their own data. Banking will also come under scrutiny as will servicing of vehicles to ensure consumers can choose who does their repairs.
Some changes to the ACL have been identified; these findings will be made available in August. They should cover price transparency and extend unconscionable conduct provisions with increased penalties particularly for misleading conduct. A general safety provisions paper will be released later in the year inviting consumer input.
Other areas being addressed are the ticket scalping and fees for paper bills where a national approach is required. The Minister said that the Commonwealth was supportive of legislation regarding gift cards introduced in New South Wales. Retirement villages are another priority for consumer protection and investigation has begun to see if the Commonwealth has a role to play here.
A panel discussion entitled ‘Managing your data – is there an algorithm for that?”moderated by Lyria Bennett Moses, Associate Professor, UNSW Law.
Panelists: Prof James Arvanitakis, Pro-Vice Chancellor), Western Sydney University
Kate Carruthers, Chief Data and Analytics Officer, UNSW Sydney
Viveka Weiley, Head of New Things, CHOICE.
Panelists told delegates:
Data is a two-edged sword and a filter was needed for ethics, especially for business. The risk is what it is done with the data - it is powerful, frightening and exciting. Four big companies are accumulating data. It was stated that Facebook is manipulating people’s emotions. Artificial intelligence and robotics are coming into play. The problem is that when machines make decisions there is no human interaction. No data is neutral, but what you don’t put in is inherently biased. Google and UTube can take a person to extremes (e.g. more and more violent videos), and they do this to keep the person watching for higher engagement. Oddly, women have more on screen/dialogue in horror movies than men do.
Differential online pricing was considered unfair, for example, business to consumer transactions will need to employ ethics in their dealings. Initially OPAL (travel cards in NSW) was found to be tracking concession card holders, but this has now been legislated against.
China is presently bringing in data, which in the extreme, could prevent a person from’for example, buying a ticket for something. Google has created a language that other Google machines can speak to, which is out of the public’s control and may have unintended consequences. Human brains may not be able to understand what the machines know.
Universities have no restriction on their use of data, but institutions need to look at ethical consequences. Machines will talk to machines without human oversight and a decision will result. The question is how to make that accountable. The UNSW has a data governance system in place which takes into account risk, compliance and privacy. Machines could have anti-discrimination/law compliance built into them.
From research undertaken, consumers are aware of data collection, but not who is using it, how it is being used and why, or who is selling it.
Keynote Address - Alan Kirkland, CEO CHOICE.
Mr. Kirkland said CHOICE has an emphasis on financial services: new credit card reforms and insurance reform. He was pleased that ASIC had an intervention power provision underway which was needed to regain consumer trust in the financial system.
He spoke of a report, ‘Dirty Little Secrets’ which revealed the problems arising from some financial advice and practices which caused consumer detriment on a huge scale.
CHOICE’s watch list includes:
- Insurance -add on or ‘junk’ insurance consumers are offered and bundled with credit cards, car sales etc.
- Electricity - ripping off vulnerable consumers. People often find themselves on the default plan. The standing offer was the worst on the market and he sees as much frustration in the energy sector as with finance.
- Renting:The problems here are yet to be fixed. Renters have a fear of complaining in case they are discriminated against. The market is fragmented, vague and lacks a clear purpose. Australia needs to move to principle based modern laws
Panel Discussion: Happy Retirement - not just a glossy brochure?
Moderated by Sarah Danckert, Journalist, Fairfax Newspapersauthor of a recent report on the problems associated with Retirement Villages.
Panelists: Denise Boyd, Director, Policy and Campaign, Consumer action Law Centre
James Kelly, Co-Founder and Managing Director, Lifestyle Communities
Ian Yates AM, Chief Executive, COTA Australia.
Moving into a Retirement Village could be an exciting process but so often ends in litigation. There is a severe power imbalance between the parties, it is costly, complex and people need help to exit if they want to. There should be an alternative to the adversarial process now in place and Tribunals are not ‘fit for purpose’; as they have been tacked onto existing processes. Most people do not understand what they have signed and any contract should be under the auspices of ASIC.
Presently 18 months compulsory acquisition is being legislated for which is better than some situations when people exiting a retirement village have had to wait much longer for settlement. There is a concern that the larger companies may swallow the smaller ones if there is too short a time frame for settlement.
At present the States regulate retirement villages but it maybe that there is a role for the Commonwealth. Mediation may be a better way to go and any internal dispute resolution should be well carried out. There was a view that the dispute resolution process should be funded by the industry and decisions should be binding.
As the ACL covers the whole country, it was queried why t the same laws are not Australia wide for retirement villages? Some contracts are over 100 pages - felt to be too long. Research shows that less that 50% of residents are aware of the dispute resolution process. In New Zealand they have a Statutory Supervisor who looks at any dispute and the system works well.
As most contracts are really renting under a leasing system the question was asked why it could not be regulated under credit laws. People do not always realise that they are buying a ‘right to reside’, not the property.
Under the Lifestyle Communities Villages, residents own their home under a 99 year leasehold arrangement. The house may be sold on the open market at any time.
Deferred Management Fee (DMF) where 20% is paid for the upkeep upon sale. The house may have either increased or decreased in value. He concluded by saying the industry should be considered a ‘people industry, not a property industry.’
Panel members felt that the landlord should be responsible for any capital cost upgrade. Retirement village places are sold as real estate t and therefore customers feel they are ‘buying’ a property which is not the situation.
Contracts are woeful and even lawyers may not be familiar with the Act to know whether the contract offered is good for the client. It may comply with the law, but not be conducive to the needs of the client. Financial advice is also needed by those intending to move to a retirement village and making sure they understand the contract.
It was thought that, as older people no longer acquire assets, they are ripe for exploitation.
Panel Discussion: Are consumers enjoying the full benefits of competition?
Dr. Ron Ben-David, Chairperson, Essential Services Commission, Victoria
Christine Cupitt, Executive Director, Policy, Australian Banking association
Rod Sims, Chairman, ACCC
David Tennant, CEO, Family Care
Daniel Wood Program Director, Budget Policy and Institutional Reform - Gratton Institute
The panel acknowledged that poor people pay more. Energy is the worst case of competition market failure. For poor people the right to consume may not be available. They are already under duress caused by being unable to access supply. The energy market may be ‘contestable’ but it is not fair. There are always losers when markets fail and in this case it amounts to a ‘war on the poor’.
Keynote address: Dr Kate Mathews, Hon. Teaching Fellow, Bond University Consumer protection in a brave new world - the innovative disruption of the Internet of Things (IoT).
Dr. Mathews stated that IoT is here right now with smart cars, fitness gadgets, in Alexa (Google), the garage door, the refrigerator and air conditioning. All of these can be ‘smart’.
IoT is defined as an expanding network of consumer devices which are internet-connected, sensor laden and collect, process (cloud), analyse and interact with human, environment and sensate data and by this hybrid physical and virtual interconnection are called ‘smart’. This is huge scale, huge scope and there are huge stakes. By the year 2020 there will be 50 trillion devices! Consumers International is of the opinion that IoT will present challenges for consumer protection. it is dominated by large entities (e.g. Google, Apple etc). Google’s Alexa is informed by Artificial Intelligence and it learns from talking to it.
Hybrid products and software products may live longer than their owners or the software. One scenario could be that these hybrids will be able to turn your device(s) off if you don’t make your contracted payments. Contracts are often long and mostly not read, but unless ticked to say they have been read, a consumer cannot buy the product. There is non-negotiability and consumers ‘give up’.
Since 2013, 9,230,693,578 data records have been lost or stolen! Security and privacy can be built into devices, but companies don’t want that. Consumer data is now the new ‘oil’ of the century. Data can be taken, infused with other data and can still be re-identified from whence it came, even if taken anonymously.
Smart cars have been data collecting since their introduction - they are a data collecting machine. There is no appropriate road infrastructure and these cars require specific regulation. All devices are hackable, deceivable and may be coded to kill a person.
Privacy studies show that smart cars are transitional technology from old type driver operated machinery to completely autonomous driving. Auto piloting is NOT a safety feature; it is there only to assist driver fatigue. Location data aggregated may have unintended consequences.
‘Privacy and Security by Design and by default is the best way forward and should be placed in the Australian Consumer Law.
Concluding her presentation. Dr. Mathews said the priorities should be:-
1. Optimise privacy
2. Simplify consumer information
3. Enforcement regulations required
4. Alliance approach.
Academics, Technologists, lawyers, consumers and policy makers all have a role to play in the development of these protections.
The Bond website has e-publications of interest on the above.
Congress Soapbox - spotlight on consumer research and gaps convened by Gordon Renouf, Deputy Chair, Consumers Federation of Australia
Allan Kirkland ,CHOICE. said their work is focusing on cots, pool fences and trampolines where voluntary standards have failed. There are not enough incentives to make the manufacturers comply so a general safety standard in needed and should be provisioned in the ACL. Consumers were encouraged to support this.
Denise Boyd , CALCspoke of understanding your audience to get your message across and gave an example of how CALC had researched and tailored a message to young adult males with regard to financial literacy by producing a short humorous video which brought home the message home.
Tess, West Justice,(refugee organisation) detailed the issues involved when a person’s first language was not English. They sometimes enter blind into contracts for accommodation, goods and services and are often taken advantage of. Such people end up depressed and ask, ‘Why does this keep happening to me?’ They are fearful of the legal system and embarrassed that they do not understand.
Brett Lovett, Standards Australia spoke on the importance of standards in all facets of life. Brett gave as examples the Australian Standard for Olive Oil, which for Australian producer COBRAN, resulted in numerous awards for their product around the world and AS/NZS 6400, on Water efficient rating labelling of products (a similar standard to that of energy efficiency for white goods involving a star rating system also using stars, is likely to be taken up overseas.
Elaine Attwood AM (Revised and edited by John Furbank)