Our rights when we buy goods a services – whats new?


Welcome to law for community workers on
the go
A series of podcasts designed specifically for community workers
health workers and anyone else who works to support people in their community
This series is brought to you by the community legal education team here at
legal aid New South Wales
And our aim is to help you help your clients
So tune in whenever you can in the car on the train at the gym cooking dinner, basically
wherever you already listen to podcasts So we hope you enjoy today’s episode and
that you learn something new and interesting
In this podcast I’m talking to Finn Hipkin
Finn’s the solicitor in the consumer team here at legal aid New
South Wales and in this discussion we covered a range of topics including what
the consumer law team does, why Finn sees consumer law as so important and what
the recent establishment of the Australian Financial complaints
Authority means for community workers Finn is really passionate about what he
does and really knows his stuff so I hope you enjoy the discussion
I’d like to begin by acknowledging the traditional owners of the land where
we’re recording this podcast
The gadigal people of the eora nation and pay my
respects to their elders past and present
Finn great to have you with us today if I could just get you to start off by
talking about a particular case study where you feel like you or your team has
had a really big impact on a client
Yeah absolutely I was having to think about
that the client that I’ve assisted that’s really shown the value of the
work we do in the consumer team
And the client that sprung to mind was a
paraplegic client who lived in regional New South Wales
We ran an outreach there
Her legal issue was that she had purchased a motor vehicle and because
she’s a paraplegic the motor vehicle had certain specifications that you know she
needed in order to operate it
She bought this vehicle from a used car dealership
in Sydney for about $20,000
Soon after purchasing the car it broke down
There were quite a few failures with the car she was unable to
get an outcome by negotiating with the dealer and she was left pretty much
immobile
You know she used a wheelchair and really needed this car to get around
We took instructions from the client and identified that the supplier had
breached certain sections of the ACL or the Australian Consumer Law
We tried to negotiate with the dealer with limited success,
so then assisted the client with an application to NCAT or the New South
Wales Civil and Administrative Tribunal seeking orders that the dealer repair
her vehicle so she was able to use it And the tribunal made a decision in her
favor and the the client was able to get those those important repairs done
And I think given that the importance of of the vehicle for that particular client
given her vulnerabilities that was an outcome that really stuck with me in
terms of the assistance we’ve we’ve been able to give to the community
Thanks for sharing that Finn
Towards the end of this podcast we’re going to be talking
about a new and exciting development and that’s in relation to credit providers
the responsible lending a financial hardship that there’s a new dispute
resolution body
There is indeed
I imagine your team is pretty excited or
maybe that’s the wrong word
But we’ll touch on it at the end of the podcast
but I just wanted to encourage all our listeners to stay with us until the end
because we will be talking about that and and what impact that might have on
the clients of community workers
Sounds good
It’s a very important development in consumer law so as Josh said stick with us
So now I just wanted to ask you Finn what are some of the things that you like about your job and why is it
that you think consumer law is really important?
Yeah I mean I’ve been in the
job for for about a year and a half now and what I really like about it is the
diversity of work that we’re able to assist clients with I mean I think that
consumer law issues are some of the most common legal issues that people face
And for that reason we’re able to assist clients with a whole range of different
issues
We see clients that have entered into loans with a credit provider and in
circumstances where the credit provider shouldn’t have given that person a loan
That brings up what’s called responsible lending issues
We see clients that have signed up to credit cards and other forms of credit
unable to make the repayments even though the contract was valid
We call that hardship and we work ourselves assisting clients with those issues and
also referring clients to appropriate organizations like financial counselors
and other support workers to deal with that kind of thing
We also see situations where debt collectors are chasing our clients for money for maybe
a phone bill or or a gas or electricity bill and we can assist clients with that
kind of thing
Outside of the sphere of credit we see clients like the one I was
talking about before that have consumed goods and services that they’ve paid for
but they’re not happy with
So we can help clients navigate the the Australian
Consumer Law in seeking remedies where they have those issues
We see clients with payday loans or short-term credit contracts
Consumer leases, repossession
of motor vehicles and then more recently we’ve seen quite a few clients who have
debts in the context of a domestic violence relationship
So we can assist people with with that kind of thing as well
So I would suggest that if you see clients facing any of these issues to get in contact with with legal aid
I think we’re going to go through how how people can do that later on
Just to get some some preliminary advice and to try and get in as early as possible because
with consumer law issues that’s that’s often the most important thing
The time limits are quite strict are they with consumer law in general?
Yeah they certainly can be it obviously depends on the kind of matter that a consumer comes
to us with but as a general rule of thumb the earlier a person comes to us
for legal advice the easier it is to find a solution for that particular
client
When you give advice to a client are you often trying to build their
capacity so that they can resolve the issue themselves or is that you taking
on the matter and representing the client?
Yeah that’s a good question we have we have a few different ways we can assist clients one of the ways we can
assist is is through a 20-minute one-on-one session for legal advice and
anyone in New South Wales is entitled to come in and book an appointment to see a
civil law solicitor for advice
And then to answer your question whether we can
see decline on an ongoing basis will depend
on a number of things: whether their matter comes under our our guidelines,
whether the client has capacity to advocate for themselves,
and that would depend on on the kinds of questions we ask the client and the
answers they give
In some cases we can assist clients with matters on an
ongoing basis and there are certain things that a client will need to do to
satisfy legal aids tests for a grant of aid
What is it that you think makes consumer law the most prevalent of any type of legal issue that people’s
clients may have?
What I’ve seen in my work is that consumer law issues tend to
compound and if they’re not addressed early like I was saying earlier they
they get worse
So so the kinds of clients we see often have numerous
consumer law issues they don’t just have one credit card that’s overdue they
might have a credit card that’s overdue, a car being repossessed, a high
electricity bill, etc
Because of fees, interest and the consequences of not
paying money when it’s due to these kinds of providers
Failing to deal with consumer law issues early often makes the problem worse and exacerbates a
problem for consumers
And this is particularly the case in my experience
for people that are disadvantaged
I think that consumer law issues tend to
disproportionately affect people that have less money
As an example of that someone that’s on on Newstart struggling to you know to make ends meet they might
be excluded from mainstream credit that they would otherwise be entitled to
So they might turn to alternative forms of credit like payday loans
Payday loans tend to have high interest and high fees for default
So while it might seem like a good idea at the time to get a payday loan there’s a snowballing effect where
a loan is used to pay off a previous loan or a loan is used to pay off an
electricity bill
The issue is never actually resolved and clients can find
themselves in even worse financial position than they were in previously
So it comes back to the issue that I’ve that I’ve raised a couple of times which
is it if community workers and clients come to legal aid or other organizations
earlier, these issues are easier to unravel and to deal with
Another example of the way that consumer issues disproportionately affect people
with less money is a consumer lease So while someone with a salary might go
out and and purchase a washing machine for $4,000, someone that’s struggling to
get by won’t have that kind of capital to expend
So they might enter into a consumer lease for a washing machine and if you if you examine the the kinds of
contracts that people in enter into in this area quite often they’ll end up
paying you know three or four times the value of the washing machine over the
course of the contract
And then not actually own it at the end so in that
way the person that is earning less is actually paying more for a for an
everyday product
One of the terms that you just used then mainstream credit
what what do you mean when you say mainstream credit?
Yeah I mean mainstream credit would refer to someone being able to get a loan from maybe a bank or
another credit provider
And it’s not to say that people don’t experience issues
with mainstream credit providers
We’ve seen in the banking Royal Commission
that there are there are significant issues in that area
When people aren’t able to get loans through banks because of diligent responsible lending
assessments that’s when they turn to peripheral credit or payday loans and
and and things like that
Sometimes people need to resort to to these kinds
of products in order to in order to get by
But we would encourage people to
contact a financial counsellor at that point who can assist with going through
a person’s finances and and helping them out you know with budgets and things
like that
Financial counsellors can be it can be accessed for free
There’s a number you can call financial counsellors Australia and we’d encourage
people do to do that
And also they come in to legal aid and we can sort of
facilitate that kind of referral
And that’s the 1800 007 007 number?
Pretty sure that’s the one
Can you explain what a payday loan is? Yes so a payday loan is is a very
high-cost short-term loan
Under the legislation it includes small amount
loans of up to $2,000 that need to be repaid between 16 days
You know the reason they’re called payday loans is that they’re supposed to tie people over
when they get to the end of the the pay cycle and need a small amount of money
in order to meet a financial obligation And there are certain kinds of laws that
small amount credit contracts have associated with them and in
circumstances where obligations have been breached by the provider legal aid
can assist with clients in these situations
At the beginning of this podcast you talked about people who purchase a product or a service and then
they have some issue and you’ve talked about our our rights under the
Australian Consumer Law
Are you able to give our listeners a quick understanding
of some of our our basic rights when we when we purchase goods and services? Yeah when you purchase goods or services in New South Wales you’re covered by what’s
called Consumer Guarantees
Consumer Guarantees are statutory guarantees
Which means that they’re enshrined in legislation
And they exist in addition to any warranties or express guarantees that the supplier gives
So that applies whether you buy an old car from a supplier whether you buy you know a
dishwasher whatever it might be
You’re covered by the Australian Consumer Law and the consumer guarantees and the guarantees
there’s a few of them but but the important ones relating to services
other services are fit for purpose and provided with due care and skill
In terms of goods there’s a guarantee that goods are of acceptable quality
And if you ask a supplier to provide goods or services for a specified purpose then
there’s a guarantee that that will happen
Depending on the nature of the failure if there is an issue you might be entitled to remedies and we can
advise about how you might get those remedies
So it might be complaining to Fair Trading at first instance and if that doesn’t work you might have a claim
to tale the to the tribunal
And when you say fitness for purpose does that mean
that if I go into a shop and I say that I’m purchasing these shoes
for this particular purpose so they’re my I don’t know just some casual shoes
and then if they break down after a few months, by the way this is a real story, the fact that I made it clear what I’m
gonna use them for and then they after a few months they’re they no longer
working and they’ve got holes in them, would that be a breach of the fitness
for purpose or is that more of an acceptable quality issue?
It may it may well be obviously I can’t give specific legal advice about your issue Josh, good
try, but it will depend on such things as as what you asked or what you told the
provider when you purchased the shoes
So for example if you if you went in there and
you said I want a pair of shoes that are gonna be good for trail running
And you went trail running once and they broke you may be able to argue that the goods
will not fit for a prescribed purpose
It will depend as well on on such things as
the the cost of the goods, the use you’ve put the goods to, the time that’s elapsed
between purchase and and damage
It is quite a confusing area of law and and
the remedy you can get depends on on how you act having identified that breach
So in some cases you can you can what’s called reject goods and send them back
to the supplier and ask for a refund
But to do that you need to show that there’s
what’s called a major failure with their with their failure to comply with the
guarantee
Yeah the only reason I ask that is because it’s it’s really helpful
for for our listeners to get an idea of the kind of process that you go through
when a client comes in with a with a particular issue
I found that really helpful and I’ll I’ll be following that advice that you didn’t
give specifically to me
Earlier on we said we would be talking about something
quite exciting a
And that is the creation of the Australian financial complaints
authority
Finn, would you be able to explain what the Australian financial
complaints authority does and why this is a little bit
exciting
Yeah absolutely so generally when when someone has an issue with a bank or a credit provider the first thing they might do is go to that bank
or credit provider and try and resolve the dispute with them
That’s called internal dispute resolution
If that doesn’t work there are organizations in
New South Wales that provide what’s called external dispute resolution
AFCA is one of those organisations It’s a one-shot stop for people with
disputes with financial services or credit so AFCA can assist consumers
with disputes about credit providers, credit cards, home loans, personal loans
short-term finance like payday loans
It can also assist consumers where they’ve
applied for financial hardship and haven’t been able to come to a
satisfactory arrangement with their credit provider
It can help with guarantees and investment in small business loans as well
As I said it can also assist with insurance disputes
Home and content insurance, car insurance
things like that and because the SCT has now merged into AFCA it will also be
helping consumers with disputes with superannuation funds
So for example if a claim for TPD insurance or something like that these disputes will now go
through AFCA
And that’s from the 1st of November
In terms of the the process usually people have to try and resolve their financial dispute directly with
the credit provider or insurer
After that time people can can apply to AFCA
who will attempt to mediate and it might ultimately make a binding determination
that the credit provider or insurer needs to follow
There are time limits that that people should be aware of with filing with AFCA which is another
reason that people should seek legal advice sooner rather than later if they
have an issue with the financial service provider
So previously people would have made complaints to the credit and investments Ombudsman, CIO
Financial Ombudsman Service, FOS, or the superannuation complaints tribunal, SCT
all of those complaints will now be going to the Australian Financial
complaints authority or AFCA
Are you expecting AFCA to handle complaints in a different way?
How much do you think things will change?
Yeah I think you know we’re hoping that because there is now a
streamlined uniform approach that it’s going to be easier for consumers to
lodge a complaint and to have it resolved quickly
I think that AFCA has a fast-track process for for complaints that may be resolved quickly
It’s early days but we’re hoping that the the coming of AFCA will will lead to
quicker and more efficient outcomes for the consumers
And you you mentioned TPD insurance before, what what does that stand for?
We’ve got we’ve actually done an episode on this so about any workers should know
Yeah well it says the total and permanent disability
Usually when someone has superannuation they also
have a default insurance it’s attached to that superannuation
And that’s either or both of income protection and total imminent disability
And those forms of insurance are there to cover people if they suffer an injury that means that
unable to work
It’s quite a complicated area of law so if you have a client that
has said that they’ve been injured and therefore are unable to work, we would
suggest you come and get some legal advice
Another bit of news in the consumer law space for is for people that have a vocation and education
training or vet student loan
Can you talk about what these changes are Finn
and when they came in?
Yeah so we’ve had some very good news for vulnerable
consumers who have signed up to courses with private training colleges
And as you might know we’ve received a large number of complaints from clients who
have been in many cases unfairly signed up to to courses with private training
colleges
New legislation provides that a student’s fee help balance can be
re-credited where the student incurred a vet fee-help debt as a result of
inappropriate conduct by that providers
So by providers of private training colleges
So where where we consider a client has been subject of
inappropriate conduct by a private training college, this new legislation
allows the the vet student loans Ombudsman to make recommendations in
relation to the re-crediting of fee help balances by the Department of Education
So there’s quite a few different organizations and bodies involved but
but in essence it means that if if a client has been mistreated or has signed
up to a private training college for example under duress there is now a
mechanism for them to seek the re-crediting of amounts of money that
they’ve they’ve incurred on their HECS debt or their fee help balance
We’ve been finding it in some cases students have been mistreated by the colleges
during the process of signing up
So they may have been incurred they may have
been compelled to sign up under duress They may have been signed up to a
product that isn’t suitable for their needs perhaps because of their lack of
English language skills
They may have been induced to sign up you know through
the sale of or through them through the provision of you know free laptops and
marketing like that
So so where a student has signed up to a vet
fee-help loan and they haven’t completed the requirements for the for the vet
unit of study and it’s reasonably likely that the provider engaged in
inappropriate conduct in relation to the unit or to the course, then then students
may be entitled to to this new remedy And does it only apply to loans from the
first of January 2019?
No the legislation applies also to older loans including
loans that occurred prior to the 1st of January 2016
So I’d encourage community workers and students to come and get some advice from us about their specific
their specific loan
The fact that the Ombudsman can now
make a recommendation to the Department of Education that a debt be remitted is
is a positive step forward
And can you tell us a little about what the process
is after somebody puts in a complaint to the Commonwealth Ombudsman?
So after a complaint is lodged the Ombudsman will determine whether it can investigate the
complaint
Then it might ask a person to provide further information and may
contact the the provider
And then depending on the nature of the complaint
and the documents received it may decide to make a recommendation to the
Department of Education to re-credit a vet fee-help balance
The process is designed for clients to lodge complaints themselves
So we would encourage clients to to do that themselves they had the capacity
Community workers might be able to help a student with gathering relevant documents and information to
substantiate to substantiate a complaint But legal aid is always available to
provide legal advice on these kinds of issues including the process of
making a complaint as well as any other options that might be available to the
particular client
There’s some more exciting news in the consumer law space
in relation to Fair Trading getting some new powers
Yes so new legislation introduced this year will give the commission for fair training the power
to issue what’s called a consumer guarantee direction if a dispute has
been through fair tradings dispute resolution process and a resolution has
not been reached
They can consider issuing a consumer guarantee direction
that that requires the business to repair replace or refund the particular
good under certain circumstances
The new legislation came into effect late last
year on the 28th of December 2018 and it will only apply to new complaints
So in other words complaints that have been lodged with Fair Trading after that time
so after the 28th of December 2018
And what will the process be when somebody
makes a complaint to Fair Trading now?
So the the process of initiating a
complaint is largely the same
A consumer will make a complaint to Fair Trading,
Fair Trading will contact both parties to encourage them to resolve the dispute
And if no outcomes reached the consumers is advised of their options
The differences are now they’ll be advised of this new option which is applying for
a direction Fair Trading will then review the
application and invite both parties to make written submissions about the
complaint
Information received from Fair Trading from both the consumer and the
business will be shared so that the other party has the chance to respond
That application will then be assessed and fair trading will decide whether to
make a direction
And the consumer in business and totally the outcome of the
application
This is this is different from what happened before where Fair
Trading did not have any power to to compel the business to to do anything
for the for the consumer
Previously if the business just decided to ignore a
fair trading recommendation it would be up to the consumer to exercise it rights
by going to the tribunal or to the court So this is a new and significant power
that Fair Trading have to actually compel a business to to refund or or
replace a good if the matter falls under the the relevant legislation
How will
Fair Trading decide if they will issue a direction or not?
So Fair Trading will give the business and the consumer an opportunity to provide written
information
And they’ll identify which of the Consumer Guarantees is relevant
once they’ve identified which of the guarantees is relevant they’ll assess
whether there’s been a failure to comply with the guarantee
they’ll assess whether the failure is major or minor and then they’ll identify the
appropriate remedy
which will be refund replace or repair
And is it free for somebody to make a complaint to Fair Trading, and will it be free to ask the
ask Fair Trading to issue a direction? Yeah it will be it will be free
There’s no there’s no charge for the Fair Trading service
There are however some limits on the kinds of complaints that might give rise to a consumer guarantee
direction
So firstly it needs to be about a product rather than a service
The product must have a purchase price between $25 and $3,000
It must have been purchased within six months before the consumer makes a complaint and both the
consumer and business must be in New South Wales
For corporations however they only need to be you need to have a presence in Australia
There are also a list of excluded products so matters that aren’t eligible,
like motor vehicles, secondhand goods solar batteries, products relating to a
home building claim, or a product that’s already subject to a review by a court
or tribunal
And I guess being in their consumer law team Finn you deal with
a lot of people that obviously want to make consumer law complaints – do you
when you look back over some of the clients that you’ve had can you see that
these new powers would have made a real difference in some of the clients that
you’ve assisted in the past?
Yeah absolutely
The difficulty that clients faced previously particularly where they’re purchasing a good
that isn’t towards the top end of of cost but there’s no but that’s
nevertheless important to their lives You know a fridge for example might cost
$1,200
The difficulties faced by by disadvantaged clients when that kind of
good fails is that going through the the process of lodging a complaint with Fair
Trading and then going to the tribunal where often expert evidence is required,
it wasn’t wasn’t necessarily a feasible option for many clients
So I can see why we haven’t seen any of these matters yet I reckon that the the efficiency of
making a complaint to Fair Trading and seeking a direction and the speed that the direction might be issued may help consumers with with
with claims where the product isn’t isn’t necessarily very expensive
One of the things which i think is really important for our community workers to
to be aware of is the law checkup tool And that’s a tool which suggests certain
questions for community workers to ask their clients so they can identify all
of the different legal issues be they consumer family or or crime
So I just wanted to throw that in as a quick reminder to community workers that if
you get a chance please do one of those checks with your client
Good idea I’ve got a copy of the law check up tool in front of me and it’s really just a summary
the kinds of questions you can ask client to identify legal problems
It doesn’t need to go any further than that You know you might ask a client are you
having trouble paying your fines
And if they say yes that that’s an issue that
might be a legal one and you can refer through to legal aid
And generally in New South Wales if somebody has a legal issue the first place they should go for
free legal advice information and referrals is is LawAccess
Yeah if somebody is a community worker out there listening and they’ve got a client who’s
got a consumer law issue what would be your advice to them about the best way
for them to refer a client with a consumer law issue?
Yeah I think that if the client lives near a legal aid office the person should contact the the the
nearest legal aid office and book an appointment to speak to a civil
solicitor
That solicitor will be able to take instructions from the client,
provide advice, referrals and if necessary conduct some some work for
that client on an ongoing basis
And we’ll put a link to all of the different
legal aid officers and the LawAccess number on the description of this
podcast so all our community workers have access to that information thanks
so much for joining us Finn, it’s been illuminating
Thanks Josh

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