Consumer legal and non legal essay PDF

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Compare the effectiveness of legal and non-legal measures in responding to contemporary consumer issues. Refer to two contemporary issues It is irrefutable that both legal and non-legal measures have been generally effective in responding to contemporary consumer issues, most particularly that of credit and technology. Despite a shared overall efficacy, it is clear that there has been some variation in approach of both legal and non-legal measures in addressing these contemporary consumer issues. It is strongly evident that there have been several legal and non-legal measures responding to the issue of credit, each varying in their emphasis and effectiveness. Credit, the purchase of goods or services in advance of future payment, has in recent years become an increasingly visible feature of Australia’s burgeoning cashless economy. In response, there have been several measures undertaken by the Australian legal system in an effort to uphold consumer rights, largely under the purview of the Australian Consumer Law (ACL). This legal measure has been significantly effective in addressing the rapid rise of credit, providing legal consistency for all Australian consumers by harmonising state and territory credit laws under Commonwealth jurisdiction. Consequently, this measure has not only provided crucial stability for the consumer credit sector but has ensured that all Australian jurisdictions are now in accordance with the National Partnership Agreement to Deliver a Seamless National Economy, which according to the Productivity Commission, will be delivering consumers savings of up to $880 million annually. The precipitous increase and over reliance on credit has also posed new and significant risks for consumers, chiefly that of exploitation by unscrupulous lenders. Additionally, the National Credit Code, a seclude to the National Consumer Credit Protection Act 2009 (Cth) has also been an effective measure in responding the the growing issue of credit, ensuring that credit liabilities and obligations are transparent to all parties, mainly through mandating the use of written contacts between consumers and lenders. This is augmented by the legal system’s imposition of severe sanctions whereby failure to comply can result in civil penalties of up to $500 000 or criminal charges, hence providing an effective avenue from which consumers can achieve justice. Similarly however, there have also been several non-legal measures that have likewise addressed the issue of credit, although with an obvious variation in emphasis. Whereas the aforementioned legal measures have been effective in enshrining into law, the government’s response to the issue of credit via its commitment to consumer protection, the non-legal approaches have in contrast been considerably more effective in providing consumers with the information necessary to conduct their dealings responsibly. For instance, the Financial Ombudsman Service (FOS) is a prominent example of an effective non-legal mechanism protecting consumers, providing crucial and accessible advice and acting as a mediation service designed specifically to resolve credit disputes. In fact, the importance of the FOS as a mediator was recently reinforced in an FOS ruling, Australian Property Custodian Holdings [2011] VSC, which increased the power of the FOS to mediate disputes, even while a credit-lending agency is in administration. This approach, focusing more on empowering the consumer with the requisite knowledge to make informed credit decisions, starkly differs with that of the legal system which has strongly emphasised the primacy of punitive measures acting as a deterrent. However, the effectiveness of the FOS in addressing the issue of credit suffers somewhat due to its

evident failure to properly advise consumers of the risk in relying too heavily on credit, despite being ideally poised as a prime source of consumer information to do so. According to the Reserve Bank of Australia in its 2016 Report, credit card debt is accruing $32 billion of national interest, $1981 on average per credit card, posing a considerable long-term risk to consumers that has yet to be rectified. (Credit Card Limits Hit Record High in Australia, Herald Sun, 2016). Nevertheless, it is patent that both legal and nonlegal measures have responded to the issue of credit in both differing, yet similarly effective ways. Moreover, it is clear that there have been both varying yet nonetheless effective legal and non-legal mechanisms in addressing the issue of technology. Technology, the application of scientific knowledge to improve human life and enhance consumer transaction has become increasingly oriented towards global communication, particularly over the internet. While the international nature of web-based services has limited the effectiveness of Australian law in responding to the issue and in protecting consumers, under both the Telecommunications Act 1997 (Cth) and Competition and Consumer Act 2010 (Cth ), the Australian Competition and Consumer Commission (ACCC) has been given some authority to govern dealings with international telecommunications operators. For instance, the Australian legal system is capable of issuing arrest warrants abroad pursuant to the existence of an extradition treaty, thereby illustrating it’s partial effectiveness. However, the complex nature of diverse international jurisdictions, often rooted in widely varying ethical standards has meant that true monitoring of technology on an international scale has been an arduous and extremely difficult process, thus hampering the effectiveness of the Australian legal system in responding to this issue. To combat this, the London Action Plan was developed, an international agreement between enforcement agencies serving as an effective symbol of the global commitment to addressing the issue of spam and its growing impact as technology develops, further accentuating the effectiveness of legal responses to this issue. Additionally, there have been non-legal measures, mainly independent third-party organisations, developed to ensure that technology is not misused to unfairly communicate with the consumer. Whereas legal measures have mainly been reactionary, the non-legal response has been far more effective in encouraging voluntary cooperation among technological firms. The Australian Direct Marketing Association (ADMA) for example, acts as a self-regulating industry body for directing marketing companies. Forming the ‘emarketing Code of Practice’ in 2005 which stipulated how direct marketers can and cannot use electronic messages to reach consumers, this body serves as an apt illustration of the efficacy of non-legal mechanisms in guarding consumers when dealing with technology. Further, the Internet Industry Association (IIA) has been a similar demonstration of the effectiveness of non-legal measures in addressing this issue, serving as an organisation outlining the the role and responsibility of internet service providers (ISPs) concerning spam. Following this directive, the IIA has developed a ‘Spam Code of Practice’ to supplement the Spam Act (2003) (Cth), explaining to ISPs its requirements, the benefits of compliance and the consequences of non-compliance. However, the aforementioned nonlegal measures have been hampered in their effectiveness due to being limited largely to domestic operation, doing little to combat the misuse of technology internationally. In fact, according to the Australian Bureau of Statistics, 12.4% of global spam originates from

the United States, completely outside Australian jurisdiction. Nevertheless, it is obvious that both legal and non-legal measures have been largely effective in responding to the issue of technology for consumers, despite variation in emphasis and some weaknesses. In summation, it is indubitable that on balance, both legal and non-legal measures have been generally effective in addressing the contemporary consumer issues of credit and technology despite some limitations and differences in approach.

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