Consumer complaints lodged with the Department of Fair Trading have previously represented long-winded and potentially expensive processes that drag on through courts or tribunals.

The cost and inconvenience to participants often outweighs the cost of the goods or services at the centre of the dispute.

In an effort to bring greater efficiency and effectiveness to this process, the NSW Government has introduced changes to help consumers and businesses to resolve these complaints.

The 2016 Australian Consumer Survey revealed that 84% of consumer disputes were resolved directly between a consumer and a business. This is definitely the preferred outcome for all parties, however if the complaint can’t be resolved at this level, as of 28 December 2018, the new process now includes the following six steps:

Step 1

A consumer makes a complaint to NSW Fair Trading.

Step 2

NSW Fair Trading will contact both parties to encourage them to resolve the dispute.

Step 3

If no mutual outcome has been reached by the business and the consumer, the consumer will then be advised of their options, including applying for a direction.

Step 4

NSW Fair Trading will assess an application to see if it meets the eligibility criteria.

Step 5

NSW Fair Trading reviews the application and contacts both parties to invite them to submit written submissions about the complaint. Information received by Fair Trading from the consumer and the business will be shared with the other party so they have a chance to respond.

Step 6

The application is assessed, and NSW Fair Trading decides whether to make a direction. The consumer and the business are informed of the outcome of the application.

At any time during this process the consumer and business can choose to resolve the dispute between themselves to avoid the need for a formal direction.

There is strict eligibility criteria that sits around this process including that the complaint can only be made about a purchased product, not a service, and the product must have been priced between $25 and $3,000.

It doesn’t cover the purchase of motor vehicles, second-hand goods or products related to a home build.

NSW Fair Trading decide whether to issue a direction based on the assessment of relevant consumer guarantees associated with the purchase and whether the businesses failure to comply with these guarantees is minor or major.

If they decide to issue a direction, it will direct the business to repair, replace or refund the value to the consumer.

The move is a welcome initiative for consumers.  For business, it presents an opportunity to reduce the number of disputes that require intervention from a government agency to resolve.

But in a climate of increased consumer awareness and offices like Fair Trading, it repays retailers of consumer goods and providers of consumer services to take steps to ensure they and their staff have a deep understanding of the consumer guarantees.

Hadyn Oriti is a Partner with Donovan Oates Hannaford. He has a wealth of experience in providing advice on Commercial and Business Law.

If you would like to discuss any issues you may have with respect to the Consumer Guarantee Direction or simply find out how these changes may affect your business, please contact Hadyn on 02 6583 0449 or horiti@dohlaw.com.au

Source: NSW Fair Trading Fact Sheet, November 2018.

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