Top 5 consumer rights issues

18th July, 2016

It’s fair to say that many consumer rights issues are an easy-made extension of common sense.

For instance, no right-minded business operator would think it’s okay to sell products that unexpectedly explode, or that are overpriced. Nor would they think it’s okay to apply duress in order to make a sale.

Most consumer issues aren’t difficult to navigate at a basic level. Applying the ‘do-unto-others’ rule will give you a solid starting point.

The ACCC lists some of the more common issues businesses will need to be aware of. Here are a few of the more common ones outlined:

1. Product safety

No consumer wants to take home a product that causes harm or unintentional damage.

Not surprisingly, consumers have the right to some hefty legal action in such cases. Many product categories have mandatory safety standards determined by the Commonwealth Government, which pertain to such issues as packaging, buyer information or materials used.

Products may also be permanently or temporarily banned, and it may be illegal to supply such products at all.

For instance, permanent bans have been placed on combustible candle holders and toxic plastics in toys, while an interim ban was recently placed on hoverboards.

Makes sure you are up to speed with current standards. If in doubt, check.

2. Debt collection

We all go through tricky financial times and consumers expect creditors to exercise some leeway when they owe them money.

Laws surrounding debt collection start with the premise of fairness. You must be sure, for instance, that the person you are contacting is actually the one responsible for the debt – not, for example, an employee or family member who has nothing to do with the debt.

Reasons for contacting debtors is also laid out to ensure, for instance, you are not contacting someone before the debt is actually due.

A grey area is how to act when contacting a debtor. It is illegal to mislead or to harass. But, it can sometimes be hard to know how that is interpreted.

The best approach is to lay out a format for debtor communications that is signed off on by legal experts, and to keep to the script.

Read: Common accounting questions: bad debt

3. Sales

Sales completed via techniques such as telemarketing or door-to-door are called “unsolicited consumer agreements”.

They carry added rights for consumers by virtue of the fact the sale is unprompted by the prospective buyer. There’s a 10-day cooling off period, and this option must be clearly articulated at the point of sale.

It’s also worth being aware that, under consumer law, sales agents are, for all intents and purposes, part of the company they represent. Companies cannot legally distance themselves from the actions of their sales staff in most cases.

Making sure your point of sale policy and support is well structured, maintained and understood by all staff will put your sales on a good footing.

4. Guarantees

Consumers hate it when things don’t work or simply break. They have a right to expect the supplier of the goods or service agrees to take some responsibility in such cases.

There are three types of basic warranty open for businesses to offer consumers: express warranties, warranties against defects and extended warranties.

Effectively, the first two refer to the actual product’s qualities, and what you will do if it doesn’t meet those standards or breaks. The third is simply an additional guarantee offered by a supplier beyond that offered by the manufacturer. This latter form may have an added cost to the consumer.

The important point for businesses is to be clear what type of warranty they can offer. Don’t overshoot, as failing to meet a warranty agreement is bad news both legally and reputationally.

5. Dodging responsibility

Consumers need to know that when they buy a product it is meant to do what it is sold to do.

For the sellers, keeping to this obligation not only ensures legal action may be averted, but it keeps customers coming through your door.

Legally, the responsibility for a product from the consumer’s point of view rests at the point of sale. Retailers, for instance, cannot deal with complaints by suggesting the customer go the manufacturer. Nor can they state that any purchase is devoid of warranty – basic legal guarantees exist on everything that’s sold.

Staff dealing with the public, especially in a sales capacity, must be well supported and informed of the basics of consumer laws. It’s not enough to train staff in the product. They must also understand the rights of consumers.

Disclaimer: This information is intended to be general in nature. For information that is customised to your business circumstances, please seek specialist advice.