New Consumer Law clarifies – and confuses

Media Release 11 December 2013

New Consumer Law clarifies – and confuses

Parliament’s passing of the Consumer Law Reform Bill yesterday finally brings consistency and transparency to consumer rights – though some big issues remain, Motor Trade Association (MTA) says.

The ‘gestation period’ for this Bill has been long and protracted – it has passed through the hands of two governments and many Ministers. The motor industry has had opportunity to comment on the content of the Bill and it now looks forward to implementing it.

“The general thrust of the Bill is positive overall, with big improvements for consumers, in particular. Most provisions are well defined and clear. Industry will need to establish some new processes and controls to ensure compliance with the new provisions,” MTA spokesperson Tony Everett says.

However, a few provisions will be more difficult to interpret, and both consumers and industry will be looking for clarification on how these work. A good example of this is the requirement for disclosure when selling extended warranties (a product common in the used vehicle industry). Under the new Bill, dealers must define any extra protections over and above those provided under the Consumer Guarantees Act (CGA).

“The difficulty with this is that the CGA terms of coverage are not defined in absolute terms anywhere. It will be interesting to see how this new requirement ‘beds-in’,” Everett says.

Another difficult-to-understand issue is the requirement for traders to only identify themselves as a trader when selling online via an auction process (where the consumer can effectively push a button and buy the good), but not if they are selling via other means, such as a list advertisement requiring further engagement between customer and seller.

“Consumer rights turn on whether or not the seller is a trader. It would seem logical that traders should declare their position irrespective of the selling mechanism,” he says.

Nevertheless, MTA is pleased to see increased enforcement powers for the Commerce Commission – “a move that should enable more efficient and cost effective control of errant behaviour, when and where it occurs,” Everett says.

ENDS

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