20 April 2011

The Motor Trade Association (MTA) said today the recent announcement that the Consumer Law Reform Bill has been approved by Cabinet and is to be tabled in Parliament, is a good first step for both consumers and traders. The merging of various consumer based laws into fewer Acts will make it easier for all parties to become familiar with the various legislative requirements.

While this Bill will bring some clarity and certainty to a number of areas of consumer law that have not always been clear over recent times, a number of gaps will still remain. MTA is pleased to see that the Bill gives some clarification to the Consumer Guarantees Act (CGA) as it applies to the various forms of auctions that exist in the market. While it is a positive step, the prospective new laws may not necessarily be simple for consumers to understand.

Under the Bill, online auctions will be differentiated from traditional auctions that are overseen by a licensed auctioneer. Professional sellers selling via online auction will face more controls, but it remains to be seen whether such sellers will be required to declare themselves as being traders in the first instance.

If traders are not required under the law to declare themselves as traders upfront, it will remain difficult for consumers to identify that the seller is a trader and therefore subject to CGA. “This was a simple requirement that could easily have been included as part of this review; its absence means there is still an opportunity for ‘under the counter’ traders to pass themselves off as private sellers,” says MTA Marketing and Communications General Manager Ian Stronach.

MTA says through its mediation advisory service, it fields hundreds of calls each month from consumers and traders seeking clarification on aspects of the law that are open to interpretation, a situation that is unlikely to alter with the proposed changes.

Stronach said “What constitutes ‘reasonable’ under CGA is an especially common area of enquiry, and difficult to interpret within the very wide parameters in the buying and selling of used cars. The changes proposed in this Bill will not make this any clearer.”

MTA adds that despite these positive steps, it would have been beneficial for Government to include prohibition of unfair contract terms in the legislation. Unfair contract terms are prohibited in Australia, but it seems that small business on this side of the Tasman is destined to battle on, albeit on a far from ‘level playing field’.

ENDS

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