In 2010, the first Australian Consumer Survey was undertaken to provide a baseline of the awareness and effectiveness of Australia’s consumer law framework prior to the introduction of the Australian Consumer Law in 2011 (ACL). On 5 May 2016, the report on the second Australian Consumer Survey conducted and compiled by EY Sweeney was released, five years after the introduction of the ACL (2016 Report).

The 2016 Report is based on a survey of 5408 consumers and 1210 business, with results weighted geographically and demographically to represent the Australian average. The full report is available here.

What do the results say?

Overall, both consumers and businesses have reported positively on Australia’s consumer protection regime. The 2016 Report shows that awareness of the consumer protection laws remains high, and that Australians feel more empowered to resolve consumer disputes while business have been reporting fewer consumer problems. There is a higher level of consumer confidence in enforcement, and an increase in businesses’ perception that disputes are resolved with a fair outcome.

However, the confidence consumers have in believing that business will not mislead or cheat has declined over the past five years, and certain demographic groups report lower levels of awareness of and confidence in the consumer protection laws, and a higher incidence of consumer problems.

The Report estimates that consumer problems cost consumers $16.31 billion per year through direct costs and lost time in seeking resolution, a marginal decrease from 2011’s figure of $16.36 billion. Business compliance costs have seen a more significant decrease over the five years, down from $21.56 billion to $18.03 billion.

What is the Government’s take?

The Minister for Small Business and Assistant Treasurer, the Hon Kelly O’Dwyer MP, has said that it is “encouraging to see the findings [of the 2016 Report] point to positive improvements in consumer and business awareness and experiences” over the last five years. The Minister highlighted the falling cost of compliance to business (down by $3.53 billion since 2011) which the Report indicates is primarily due to a lower number of problems being reported (although a higher ‘cost per problem’ figure was also reported).

Key findings

Awareness, confidence, and perception

Ninety percent of consumers, and 98% of business, reported being aware that consumer protection laws exist, with both figures unchanged from 2011. Women, younger people, and people living outside a capital city reported lower than average rates of awareness for consumers.

While just over half (54%) of consumers believe that the law adequately protects consumers, this represents an 8% increase over the 2011 figure, and accompanies a higher level of confidence that businesses treating consumers unfairly will be detected (up to 51% from 47% in 2011).

For businesses, the introduction of the ACL has resulted in increased understanding of business obligations and responsibilities in consumer law as well as a better understanding of what investment is required for compliance with the ACL. Almost 30% of business reported obtaining information about the ACL, and 84% of businesses reported having sufficient information to ensure compliance with the ACL, up from 74% in 2011.

The number of consumers taking action to resolve their problem rose from 75% in 2011 to 82%, and a significant 84% of consumers were reported to have resolved their problems directly with the supplier. However, 47% of consumers who reported unresolved consumer problems stated that they have given up on trying to get a resolution, and 35% say that the business or manufacturer does not care.

Hotspot areas

Consumer problems were most prevalent in the telecommunications products and services industry (26% of consumers had experienced a problem); internet service providers (25%); electronics and electrical goods (19%) and building, renovations or home repairs (17%).

The most common type of problem consumers experienced related to faulty, unsafe or poor quality products. This was followed by poor customer service and the provision of incorrect or misleading information.

Decreasing complaints

The 2016 Report shows that 59% of consumers experienced at least one problem related to the purchase of a good or service in the last two years. This incidence represents a 20.2% decrease over the 2011 figures, however, demographic differences, particularly age, first language, and location, were significant on this metric.

Comment

The 2016 Report provides a snapshot of how consumers and businesses are viewing Australia’s consumer protection regime, five years on from the introduction of the ACL. Quantitatively, there have been significant movements in business compliance costs, the number of consumers reporting problems, and the likelihood of consumers taking action to resolve a problem, while qualitatively there have been smaller movements, mostly positive, in perceptions of the adequacy of the regime and enforcement.

The Report does not attempt to suggest areas for improvement, and at this stage, the Government has not signalled an intention for any consumer law reform based on the survey. However, we expect the findings will feed in to the Australian Consumer Law Review, which released its Issues Paper in March 2016 and is due to report to Government in March 2017 on the operation of the ACL.