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Improving Consumer Guarantees: Efficient, Effective, and Fast Solutions

Learn about the reform of the Consumer Guarantee Directions program, which aims to provide more efficient, cost-effective, and faster ways to resolve consumer disputes outside of the court system. Discover how NSW Fair Trading is utilizing regulatory powers to shift business behaviors and enhance consumer protection.

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Improving Consumer Guarantees: Efficient, Effective, and Fast Solutions

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  1. Consumer Guarantee Directions:Using regulatory powers to shift business behaviours SOCAP SymposiumAugust 2019 Rose Webb Deputy Secretary, Better Regulation Division Commissioner, NSW Fair Trading Department of Customer Service

  2. Why the need for the Consumer Guarantee Direction reform Objectives of the Consumer Guarantee Directions program are to provide: • more efficient • cost effective; and • faster ways to reach an outcome for consumers and businesses outside the tribunal or court system. 62% of disputes about low value matters were successfully mediated Consumers frustrated with being passed from Fair Trading to the tribunal when matters not successfully mediated Unable to direct businesses to provide redress in these matters so claims of being a ‘toothless tiger’ Damage to Fair Trading’s reputation as an effective regulator Pilot program commenced 28 December 2018

  3. What is a Consumer Guarantee Direction? It meets the relevant criteria, and There is a breach of a consumer guarantee relating to products (s54-57 of the ACL), and After an assessment of all the available evidence, it is fair and reasonable in all the circumstances: NSW Fair Trading can direct the business to refund or repair or replace the good. ! Where a dispute about certain goods valued between $25 and $3000 (excl GST) remains unresolved after Fair Trading’s complaint handling process, and:

  4. The disconnect Regulatoractive Complaint handling passive

  5. Business transformation: Internal change Multiple tools to assist and support staff Nudge Evaluation =ongoing improvement Face to face training Information sessions and internal comms Enhanced operational models and system changes Extensive staff consultation

  6. Business transformation: External change Embraced businesses as customers Engagement and education Case management Better trader program Improved customer experience for both consumers and businesses

  7. Business transformation: Results so far Express Outcomes Manage Educate Decide Active

  8. Practical applications for consumer affairs professionals Nudge Engagement & education Customer-centric Active Leverage

  9. Interim evaluation: 28 December 2018 to 29 March 2019 83 42 0 400 7,000 Directions made Complaints received(all categories) Identified as CGD eligible Applications sent Applications Lodged 28 applications assessed and finalised (the remainder pending assessment) Complaint handling process finalised – matter unresolved Staff conducted enhanced complaint handling

  10. Interim evaluation: Key findings Internal business improvements Customer engagement Staff capability • Knowledge and application of the ACL • Knowledge and application of the CGD eligibility criteria • Processes and systems • Managing customer expectations and engaging with the trader

  11. Case study: Breach of s54 – Guarantee as to acceptable quality Mary bought a skirt valued at $45 from a store. The manager advised it had been on sale so would not provide a refund Mary lodged a complaint with NSW Fair Trading. Unsuccessful attempts were made to contact the store by phone so an email was sent. There was no response from the business so Mary was advised of the option to apply for a direction. At the same time, a ‘nudge’ email was sent to the business advising that Mary was being given this option and what the consequences are should a direction be issued. The store contacted Fair Trading the same day. After a discussion around consumer guarantees and the business’s obligations under the ACL, the business provided a full refund.

  12. First Direction Issued for a breach of section 56 – Guarantee that goods sold match the description James bought a branded water filter cartridge from a website which was described as removing cryptosporidium. He received a generic cartridge. James lodged a complaint with Fair Trading. James was provided with the option to apply for a Consumer Guarantee Direction. James’s application was assessed and accepted, then written submissions were requested from the parties. It was fair and reasonable in all the circumstances to issue a direction. On 3 July 2019, the business was directed to provide a refund of $43 to James within 28 days. James has since advised that the business has not complied so he is considering pursuing enforcement action with the Local Court.

  13. More information Visit aService NSW location Call 13 32 20 Visit fairtrading.nsw.gov.au

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