Dec 7 2016
The Productivity Commission says the $1.1 million maximum fine for breaching consumer laws was “too low” compared with what companies can gain.
In a draft report released Thursday it says penalties for consumer law breaches should be brought into line with the $10 million fine for breaches of competition law.
A string of companies have been fined small amounts compared to the benefits from acting illegally.
CHOICE says egg producers who falsely advertised as free range were fined between $50,000 and $300,000 although they gained up $30 million.
And the Consumers’ Federation claims Reckitt Benckiser made $63 million in falsely claiming Nurofen offered targeted pain relief, and was fined only $1.7 million.
The ACCC is appealing the penalty in court and chairman Rod Sims said it was a “bit hard to understand why there’s that significant difference” between competition and consumer penalties.
Named and shamed
The Productivity Commission is also recommending a national complaints database, a change to be opposed by the businesss sector which has already objected to a NSW version.
The NSW Fair Trading complaints register lists businesses that have had at least 10 complaints lodged against them in a month as long as the complaints are made by a “real person” even if the complaints are baseless.
Ai Group claims consumers could abuse the NSW register and cause unfair reputation damage to businesses over frivolous claims.
Businesses also said discrete businesses operating under the same franchise brand could suffer reputation damage if other businesses under the same brand provide poor customer service or breach consumer laws.
According to the latest data, senator Bob Day’s collapsed home building business Huxley Homes, Harvey Norman, Australia Post and LJ Hooker were among the most complained about businesses in NSW.
But the Productivity Commission said establishing a national database of complaints and product safety incidents has merit and the consumer regulators should consider what information from the data should be made publicly available.