Australia should establish a Retail Ombudsman to “freely, quickly and fairly” resolve disputes between “ordinary Australians” and retailers, the Consumer Action Law Centre says.
The centre provides legal advice and financial counselling for disadvantaged people.
Christmas shopping crowds at Westfield Shopping Centre in Parramatta 21st December 2016 Photo by Louise Kennerley SMH Generic shopping retail sales Photo: Louise Kennerley
Acting CEO Denise Boyd said an external dispute resolution scheme for disputes over goods and services bought instore or online in Australia would give people “certainty and justice in their consumer interactions and build trust in our retail markets.”
“Although consumers have legal protections in the Australian Consumer Law (ACL) such as consumer guarantees to a refund, replacement or repair when there is a problem with a purchased good or service, if the trader refuses to assist to resolve the dispute it is very difficult for the consumer to obtain justice,” Ms Boyd said in the centre’s pre-budget submission to Treasury.
Australians spend about $300 billion a year with retailers. Retail is the country’s biggest private sector employer, accounting for about 10 per cent of the workforce, according to Bureau of Statistics figures.
Ms Boyd said polling indicated 60 per cent of Australian would use a retail ombudsman if available.
She also noted that more than 20,000 shoppers complained to the Australian Competition and Consumer Commission about consumer guarantees in 2016, despite the ACCC being unable to take action on their behalf.
“There is a significant gap in ordinary Australians’ ability to seek justice in these cases because it is likely to involve complex, lengthy and quite possibly expensive legal action in courts or tribunals,” Ms Boyd said.
She said the scheme should be modelled on a scheme in the UK, where retailers choose to join, pay a fee depending on their size, and are able to apply to become vetted as a ‘trustworthy trader.’
The ombudsman would tackle disputes only after a person had tried to resolve it with the retailer directly. It would first try to reach an agreement between the parties; if an agreement couldn’t be reached, the ombudsman would make a binding ruling.
Cut corporate tax rates and penalty rates, retail body says
But industry bodies, in their submissions to Treasury ahead of next month’s federal budget, make no mention of a retail ombudsman.
The Australian Retailers Association said the government should cut corporate tax rates, and “allow more flexible workplace laws and support penalty rate changes”.
“Investment levels are floundering despite low interest rates,” the ARA said. “Businesses need incentives and certainty to grow and employ more workers, which in turn, will support wage growth.”
Another industry body, the Retail Council, said while it recognised the need for budget repair, the Abbott government’s controversial first budget in 2014 “had a negative impact on consumer confidence.”
“From a retail perspective it is critical that the federal budget does not further crimp household incomes, especially for low income earners,” the council said.
“Low wages growth is a positive from an inflation perspective but is a potential drag on consumption spending and consumer confidence which are both key metrics for the retail sector.”