Consumer Affairs Victoria Annual Report 2004 05

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Consumer Affairs Victoria Annual Report 2004 05 Consumer Affairs Victoria Annual Report 2004-2005 Report to the Minister for Consumer Affairs for the year ended 30 June 2005 Marsha Thomson MP Minister for Consumer Affairs Ordered to be printed November 2005 Victorian Government Printer PP No 168 Session 2003-2005 Department of Justice Director 3/452 Flinders Street Consumer Affairs Victoria GPO Box 123A, Melbourne 3000 Telephone: 03 9627 6017 Facsimile: 03 9627 6040 Email: [email protected] DX210220 Marsha Thomson MP Minister for Consumer Affairs 80 Collins Street MELBOURNE VIC 3000 Dear Minister Annual Report 2004-2005 I present to you my report on the activities and operations of Consumer Affairs Victoria for the year ended 30 June 2005. The document has been prepared in satisfaction of section 102 of the Fair Trading Act 1999 and section 16 of the Credit (Administration) Act 1984 for you to lay before each House of Parliament. Yours sincerely DR DAVID COUSINS Director Director’s foreword Director’s foreword This Annual Report highlights the many achievements of Consumer Affairs Victoria (CAV) in 2004-05. During the financial year, CAV has built on and consolidated the directions set for it in recent years. Key themes have been empowering market participants, consumers and businesses to achieve appropriate outcomes, and the promotion of regulatory reforms. A strong focus has been to engage consumers and businesses proactively in both metropolitan and non-metropolitan regions. The emphasis on ensuring effective enforcement of consumer laws was also maintained in 2004-05. This was assisted by the amendments to the Fair Trading Act 1999 passed during the year. Broader enforcement powers were utilised to achieve quicker and fairer outcomes for consumers and, indirectly, for the majority of businesses adhering to consumer laws. The use of civil and administrative remedies was expanded and a number of major court and tribunal cases were launched. Considerable success was achieved in utilising the unfair contract terms provisions of the Fair Trading Act 1999. The emphasis on product safety and credit matters was also maintained, with a major review of credit issues announced by Minister Marsha Thomson MP toward the end of 2004. In 2004-05 CAV made a significant contribution to the emerging debate over the future direction of consumer policy in Australia. An important development in this connection also was the involvement of the Productivity Commission in this debate, notably through a review of product safety. In addition, as part of its review of national competition policy, the Productivity Commission recommended a national review of consumer protection policy and administration. There are many steps being taken by the Standing Committee of Officials of Consumer Affairs and the Ministerial Council on Consumer Affairs to achieve effective consumer protection. Inevitably, however, these steps are piecemeal, slow to progress and lacking in overall coherence. A national review of consumer protection policy and administration is long overdue. Such a review would need to examine the role and scope of consumer protection policy, and to consider the appropriate distribution of responsibilities between the Commonwealth, States and Territories and the institutional arrangements applying at the different levels of Government. At the State and Territory level, a significant issue is whether linking policy advice with regulation in agencies located within Ministerial departments is consistent with best practice regulation. The role of consumer advocacy in promoting marketplace reforms also needs further consideration. During the year the Ministerial Council recognised the importance of consumer research, but did not go so far as to support the establishment in Australia of a body similar to the National Consumer Council in the United Kingdom. Director’s foreword D I would like to acknowledge the strong support for the work of Consumer Affairs Victoria from i r e the Secretary of the Department of Justice, Penny Armytage, other Executive Directors of the c t Department and staff of the Department. o r ’ s I would also like to acknowledge the leadership and support of our two Ministers during the f year: John Lenders (up until 21 January 2005) and Marsha Thomson. In September 2004, o r Minister Lenders tabled a Statement in Parliament indicating the direction and key recent e w achievements of Consumer Affairs Victoria. o r CAV has also maintained throughout the year a close working relationship with the statutory d bodies within the Consumer Affairs portfolio, and I acknowledge the ongoing contribution of these bodies. As always, the staff of Consumer Affairs Victoria have shown great dedication in meeting the many demands placed on them and in advancing our consumer policy objective. Dr David Cousins Director Consumer Affairs Victoria Director’s foreword About this Report About this Report The 2004-05 Consumer Affairs Victoria Annual Report has been compiled in satisfaction of the Director’s duty to report to the Minister of Consumer Affairs on the operation of the Fair Trading Act 1999 and the Credit (Administration) Act 1984 over each financial year. Reporting under the Financial Management Act 1994 as it relates to Consumer Affairs Victoria, appears in the Department of Justice Annual Report. The Report is also intended to be relevant, interesting and accessible to a wider audience, including external stakeholders and peer organisations. To this end, background information on Consumer Affairs Victoria, and its varied functions, has been included where appropriate. CAV in context explains the relationship between Consumer Affairs Victoria on the one hand, and a network of related organisations and government agencies, on the other. The section sets out how the operations of Consumer Affairs Victoria relate to relevant Department of Justice and Whole of Victorian Government objectives, and how the organisation participates in the development of national policies and strategies relating to consumer issues. The year in review gives a narrative overview of the operations of Consumer Affairs Victoria during the 2004-05 financial year. The details of these operations are reported in the main body of the Report, which is divided into an Introduction and seven chapters. The Introduction sets out the legislative framework within which Consumer Affairs Victoria operates. The five chapters following reflect activities undertaken in pursuit of some of the stated objectives of the Fair Trading Act 1999 (the main Act under which the organisation operates), namely: • promotion and encouragement of fair trading practices, and fair and competitive markets • protection of consumers • regulation of trading practices • provision for unfair terms in consumer contracts to be void, and • provision for the safety of consumer goods and services, and the information to be provided with these. Activities specifically in relation to credit are reported separately in the relevant chapters. The sixth chapter gives an overview of the activities of the statutory bodies, corporation and appointee to which Consumer Affairs Victoria provided support services, during 2004-05. A summary of staff development initiatives during 2004-05 is provided in the seventh chapter. A special feature on Retirement villages details the organisation’s activities in relation to this sector in 2004-05, and demonstrates how the various functions of Consumer Affairs Victoria operate together to impact particular market sectors to promote efficient functioning. The narrative section of the Annual Report concludes with The year ahead, setting out Consumer Affairs Victoria’s responses to the challenges and successes of the 2004-05 financial year, and how these have informed plans and strategies for 2005-06. In the Appendices, details of legislation administered, media releases generated, legal proceedings conducted, and financial administration, during 2004-05, are reported. About this Report Contents CAV in context xi The year in review xv Introduction xix Promoting and encouraging fair trading practices, and fair and competitive markets 001 1 Facilitating voluntary compliance 002 1.1 Keeping business informed 002 1.2 Encouraging best practice 007 2 Enforcing statutory requirements 008 2.1 Review of compliance and enforcement provisions 009 2.2 Application of new provisions 009 2.2.1 Better information-gathering 009 2.2.2 Administrative enforcement 009 2.2.2.1 Enforceable undertakings 010 2.2.2.2 Infringement notices 012 2.2.3 Expanded civil enforcement powers 012 Update: Livio Cellante, Astvilla Pty Ltd and Perna Pty Ltd 014 2.3 Strategic criminal prosecutions 015 Focus on credit and debt 016 2.4 Problem traders 018 3 Trade measurement 021 National review of trade measurement administration 022 4 Competitive markets 023 Protecting consumers 025 1 Service delivery 026 1.1 Core services 028 1.1.1 Enquiries-handling 028 1.1.1.1 Telephone 028 i. Grade of service 030 ii.Servicing vulnerable and disadvantaged consumers 031 Focus on credit and debt 032 1.1.1.2 Email 034 1.1.1.3 Face-to-face service 034 1.1.2 Conciliation and mediation 034 1.1.2.1 General conciliation 036 Focus on credit and debt 038 1.1.2.2 Building Advice and Conciliation Victoria 040 1.1.2.3 Estate Agents Resolution Service 042 Residential tenancy inspection service 046 1.1.3 Consumer advocacy 047 1.2 Pilot community education program 047 1.3 Pilot regional office 049 1.4 Funded organisations 050 vii Contents 2 Addressing consumer vulnerability and disadvantage 052
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