COMPARATIVE ANALYSIS OF OVERSEAS CONSUMER POLICY FRAMEWORKS April 2016 Professor Stephen Corones (Research Co-Ordinator) Professor Sharon Christensen Professor Justin Malbon Mr Allan Asher Associate Professor Jeannie Marie Paterson © Commonwealth of Australia 2016 ISBN 978-1-925220-95-7 This publication is available for your use under a Creative Commons Attribution 3.0 Australia licence, with the exception of the Commonwealth Coat of Arms, the Treasury logo, photographs, images, signatures and where otherwise stated. The full licence terms are available from http://creativecommons.org/licenses/by/3.0/au/legalcode. Use of Treasury material under a Creative Commons Attribution 3.0 Australia licence requires you to attribute the work (but not in any way that suggests that the Treasury endorses you or your use of the work). Treasury material used ‘as supplied’. 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Other uses Enquiries regarding this licence and any other use of this document are welcome at: Manager Editorial, Media and Speeches Unit The Treasury Langton Crescent Parkes ACT 2600 Email: [email protected] ii CONTENTS Part 1: Introduction ...................................................................................................... 2-1 1.1 Structure of the report .......................................................................................................... 2-1 1.2 Consumer protection legislation in Australia ........................................................................ 2-2 1.3 ACL as a National Uniform law .............................................................................................. 2-2 Part 2: Executive summary ........................................................................................... 2-3 2.1 Approaches to unconscionable or highly unfair trading practices ........................................ 2-3 2.1.1 General and specific protections ........................................................................................... 2-3 2.2 Misleading conduct ............................................................................................................... 2-5 2.3 Unfair/unconscionable conduct ............................................................................................ 2-5 2.4 Role of codes of conduct in unfair/unconscionable conduct ................................................ 2-6 2.5 Unfair terms and the requirement of good faith .................................................................. 2-6 2.6 Inclusion of punitive fees in contracts ................................................................................... 2-6 2.7 Pyramid schemes ................................................................................................................... 2-7 2.8 Unsolicited selling and cooling off periods ............................................................................ 2-7 2.9 Approaches to regulation of e-commerce and peer-to-peer transactions ........................... 2-7 2.9.1 Summary ................................................................................................................................ 2-7 2.9.2 Product quality ...................................................................................................................... 2-7 2.10 Unfair pricing ......................................................................................................................... 2-9 2.11 Fake reviews ........................................................................................................................ 2-10 2.12 Fraud .................................................................................................................................... 2-10 2.13 Peer-to-peer transactions ................................................................................................... 2-11 2.14 Institutional structures relating to the administration and enforcement of consumer laws ..................................................................................................................... 2-11 2.14.1 Summary and key observations .......................................................................................... 2-11 2.15 Jurisdictional comparisons .................................................................................................. 2-12 2.15.1 Comparison of main institutions for consumer protection ................................................. 2-12 2.15.2 Legislation and jurisdictional comparisons ......................................................................... 2-12 2.15.3 Comparative issues in policy and practice .......................................................................... 2-13 2.16 The revised United Nations guidelines for consumer protection ....................................... 2-13 2.17 United Nations sustainable development goals .................................................................. 2-13 2.18 Digital purchasing and digital products ............................................................................... 2-14 2.19 Other interesting developments ......................................................................................... 2-14 2.20 Measures to facilitate access to justice ............................................................................... 2-14 2.20.1 Summary .............................................................................................................................. 2-14 iii Contents 2.21 The form of and content of legislation ................................................................................ 2-15 2.22 Information and education.................................................................................................. 2-16 2.23 Assistance and advice .......................................................................................................... 2-16 2.24 Alternative dispute resolution ............................................................................................. 2-16 2.25 Regulatory oversight and enforcement............................................................................... 2-17 Part 3: Approaches to unconscionable or highly unfair trading practices ........................ 18 3.1 Legislative approaches to regulating unconscionable or highly unfair trading practices ...... 18 3.2 General protections in Australia ............................................................................................. 19 3.2.1 Introduction ............................................................................................................................ 19 3.2.2 General protections in Australia — misleading conduct ........................................................ 20 3.2.3 General protections in Australia — unconscionable conduct ................................................ 21 3.2.4 Different interpretations of statutory unconscionable conduct ............................................ 22 3.2.5 General protections in Australia — unfair terms ................................................................... 23 3.2.6 General protections in Australia — excluded terms .............................................................. 26 3.3 Punitive fees in contracts ....................................................................................................... 28 3.3.1 Australia .................................................................................................................................. 28 3.3.2 Application of statutory unconscionable conduct to punitive fees ....................................... 28 3.3.3 Application of unfair terms to punitive fees in contracts....................................................... 29 3.3.4 Competition and Consumer Amendment (Payment Surcharges) Act 2015 ........................... 30 3.3.5 European Union ...................................................................................................................... 31 3.3.6 General protection — punitive fees ....................................................................................... 32 3.3.7 Specific protection — punitive fees ....................................................................................... 34 3.4 United Kingdom ...................................................................................................................... 35 3.4.1 Introduction ............................................................................................................................ 35 3.4.2 General protection — punitive fees ....................................................................................... 36 3.4.3 Specific protection — punitive fees ......................................................................................