OFFICE OF CONSUMER AND BUSINESS SERVICES

The Hon. J.S. LEE (15:19): I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question about the Office of Consumer and Business Services.

Leave granted.

The Hon. J.S. LEE: On 11 October 2011 Frank Pangallo from Channel 7's Today Tonight talked with FIVEaa's afternoon host Amanda Blair about the new national hotline launched recently to dob in con artists. One of the statements Mr Pangallo made was:

Those things are fantastic, hotlines...it's great if the authorities that start these things do anything, and unfortunately I'd say consumer laws in this country are lagging...consumers are getting the raw deal.

He also adds that:

Our South Australian Office of Business and Consumer Affairs is one of the biggest toothless tigers in the country. People who call that place every day are given advice and nothing else, no action taken.

He continues:

They rarely prosecute...they don't do anything...we actually need Consumer Affairs with teeth. The conmen and dodgy tradesmen out there know the system, they know Consumer Affairs will do very little or anything about these people that do the wrong thing and this is how they thrive.

My questions are:

1. Can the minister explain why the Office of Consumer and Business Services is viewed by many as the biggest toothless tiger in the country?

2. Does the minister know how many letters of warning have been issued after consumers have lodged their complaints?

3. What has been put in place to monitor the notices of warnings to ensure that prosecution will take place?

4. What measures will the minister introduce to provide general protection to consumers from dodgy tradesmen and conmen than just merely providing a hotline service?

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for Gambling) (15:20): I thank the honourable member for her most important questions. The role of the CBS is quite an extensive one. They have a number of different powers. The main focus of the work they do has always been to educate and inform not just the general public but also traders of their rights and responsibilities. Their view has always been that prevention is better than cure, and it is much harder and more expensive to deal with problems when they occur, rather than to try to avoid and prevent issues from occurring in the first place.

Often we find that many of the problems that consumers are faced with are caused because of a lack of understanding of one's rights and responsibilities, both from the perspective of the trader and the consumer. I think that the CBS does a tremendous job in informing and educating the general public. Their view generally in the first instance is to provide a warning because they believe that that's often all that is needed for people to understand what their rights and responsibilities are. More often than not, Consumer affairs never hears that problem again from that particular person because it is addressed.

Consumer affairs has powers in terms of issuing warnings and undertakings, so certain conditions can be put on a trader that they are required to fulfil and, if they fail to fulfil them, they can be breached. They are also able to mandate conciliation hearings, and they also have powers to have questions answered and to have information provided to them.

The conciliation powers have only been in place a number of years; I was the minister who introduced those. They were an important advancement in the powers of the commission. To go to prosecution is a very expensive and time-consuming exercise for all parties involved, not just consumers but traders as well. The costs to traders are always passed on in terms of the costs of the goods or services they provide, so it is in everyone's interests to try to address problems very early in the piece and to try to bring the parties together to speak with each other and to resolve their issues firsthand.

The feedback I have been given in relation to that is that it is a highly successful process and that many problems are resolved in that early stage. However, CBS does not have powers to impose recommendations from those conciliation sessions onto traders. That is beyond the powers of CBS, which does sometimes frustrate consumers. Having been through that process, if matters are not resolved, they want CBS then to be able to force action. They are not able to. If further action is wanted by the consumer, then they need to seek a legal remedy and there is assistance available to help them with that.

One of the big problems with consumer affairs is often lack of evidence or incomplete evidence and the multinational nature of many traders, particularly those based overseas. It is very difficult to gain adequate information or to address the organisation when they are offshore. So, CBS is faced with many challenges. I believe it does an extremely good job in very difficult circumstances and that it does perform extremely well at the early intervention, prevention and education stages.