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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