Australian Consumer Protection Laws and impact on refunds

[RAM]

A great story illustrating just how effective political donations are in hurting Australians. The article does not go to the "Why?" Australian consumers are not protected but detailed research I did into 'legal' political donations in Australia from the mid 90s to mid 2000s across all levels - Federal, State & Local Govts join the dots on so many seemingly bizarre outcomes.

The lack of consumer protection in Australia compared with the US, UK or EU is all pervasive. For example, typically for fraud on your CC in the US you're liable for the first USD 25, Europe EUR 30, & UK GBP 20. In Australia the legislation was changed in the very early 2000s from CC companies having to prove you did not take adequate precautions to YOU having to prove you did. Remember they got rid of the signature on the back and you were forced to use a 4 digit pin instead.

NAB rejected a claim for nearly $3,000 as CCTV footage showed the lady (from UK) arriving on a Friday by taxi straight to where a friend (who forgot about losing a day travelling from UK) had arranged a job at a restaurant. She worked the rest of Friday, all Saturday & all Sunday. Monday morning she went to buy some items & her debit card was declined. Long story short, it was fully drained in Melbourne on Saturday & Sunday paying taxi fares. Police said there was nothing they could do.

The restaurant's CCTV captured the lady, sitting in the front of the taxi using her pre-paid debit card to pay the fare. She was handed a mobile terminal which she held in one hand and entered her pin using the other. "There, see," said the NAB manager, "She did not use adequate security measures, she should've covered the terminal so the taxi driver couldn't see her pin number. Her fault, we have no liability."

Compare this with the NSW State Govt being hacked earlier this year and over 738 GB of data covering the total details for over 186,000 accounts (one account can cover an entire family btw).

What drives refund & other policies? Five of the Top Ten donors to both sides of politics were the same. The relative amounts coincidentally appeared to track the % of which side held power Australia-wide. Go figure. One very well known Australian investment bank came in 11 to 13th place for both sides. One of the largest construction companies seemed to like paying political donations via their many (100s) of subsidiary companies, no idea why they'd do that. Coincidentally won a majority of Govt contracts (by value) Australia-wide.

Since the early 2010s a new spoiler/player got in the mix - foreign donors via Australian company subsidiaries. Who knew there are Chinese Govt owned property development companies 100% owned Australian-created (Pty Ltds)? Such as the major development company here owned by the Shanghai City Council (equivalent). There is a brilliant ABC 7.30 story about these foreign donors.

But I digress....

Australian travellers left thousands of dollars out of pocket, but British counterparts protected by law

Sandra and Garry lost thousands when their $38,000 overseas package tour was cancelled. But travellers in the UK have received full refunds for similar trips due to strong consumer protections.

www.abc.net.au

In July, the UK's Competition and Markets Authority (CMA) warned the travel sector that consumers had a statutory right to a full cash refund within 14 days if their package holiday was terminated due to the pandemic.

If such 'protection' existed in Australia then Q could have beaten VA into voluntary administration.

 

[Brissy1]

A great story illustrating just how effective political donations are in hurting Australians. The article does not go to the "Why?" Australian consumers are not protected but detailed research I did into 'legal' political donations in Australia from the mid 90s to mid 2000s across all levels - Federal, State & Local Govts join the dots on so many seemingly bizarre outcomes.

The lack of consumer protection in Australia compared with the US, UK or EU is all pervasive. For example, typically for fraud on your CC in the US you're liable for the first USD 25, Europe EUR 30, & UK GBP 20. In Australia the legislation was changed in the very early 2000s from CC companies having to prove you did not take adequate precautions to YOU having to prove you did. Remember they got rid of the signature on the back and you were forced to use a 4 digit pin instead.

NAB rejected a claim for nearly $3,000 as CCTV footage showed the lady (from UK) arriving on a Friday by taxi straight to where a friend (who forgot about losing a day travelling from UK) had arranged a job at a restaurant. She worked the rest of Friday, all Saturday & all Sunday. Monday morning she went to buy some items & her debit card was declined. Long story short, it was fully drained in Melbourne on Saturday & Sunday paying taxi fares. Police said there was nothing they could do.

The restaurant's CCTV captured the lady, sitting in the front of the taxi using her pre-paid debit card to pay the fare. She was handed a mobile terminal which she held in one hand and entered her pin using the other. "There, see," said the NAB manager, "She did not use adequate security measures, she should've covered the terminal so the taxi driver couldn't see her pin number. Her fault, we have no liability."

Compare this with the NSW State Govt being hacked earlier this year and over 738 GB of data covering the total details for over 186,000 accounts (one account can cover an entire family btw).

What drives refund & other policies? Five of the Top Ten donors to both sides of politics were the same. The relative amounts coincidentally appeared to track the % of which side held power Australia-wide. Go figure. One very well known Australian investment bank came in 11 to 13th place for both sides. One of the largest construction companies seemed to like paying political donations via their many (100s) of subsidiary companies, no idea why they'd do that. Coincidentally won a majority of Govt contracts (by value) Australia-wide.

Since the early 2010s a new spoiler/player got in the mix - foreign donors via Australian company subsidiaries. Who knew there are Chinese Govt owned property development companies 100% owned Australian-created (Pty Ltds)? Such as the major development company here owned by the Shanghai City Council (equivalent). There is a brilliant ABC 7.30 story about these foreign donors.

But I digress....

Australian travellers left thousands of dollars out of pocket, but British counterparts protected by law

Sandra and Garry lost thousands when their $38,000 overseas package tour was cancelled. But travellers in the UK have received full refunds for similar trips due to strong consumer protections.

www.abc.net.au

In July, the UK's Competition and Markets Authority (CMA) warned the travel sector that consumers had a statutory right to a full cash refund within 14 days if their package holiday was terminated due to the pandemic.

If such 'protection' existed in Australia then Q could have beaten VA into voluntary administration.

Yes very curious about Australia's abysmal consumer protection for (against) airlines, considering we used to be world leaders in consumer protection, and still do in some areas (iPhones have a 2yr warranty in au, 1yr everywhere else... just had one repaired last month, 1½yo.)

 

[Pushka]

Yes very curious about Australia's abysmal consumer protection for (against) airlines, considering we used to be world leaders in consumer protection, and still do in some areas (iPhones have a 2yr warranty in au, 1yr everywhere else... just had one repaired last month, 1½yo.)

I heard on the radio today that travel related complaints to Consumer Affairs were up 800% this year.

 

[MEL_Traveller]

NAB rejected a claim for nearly $3,000 as CCTV footage showed the lady (from UK) arriving on a Friday by taxi straight to where a friend (who forgot about losing a day travelling from UK) had arranged a job at a restaurant. She worked the rest of Friday, all Saturday & all Sunday. Monday morning she went to buy some items & her debit card was declined. Long story short, it was fully drained in Melbourne on Saturday & Sunday paying taxi fares. Police said there was nothing they could do.

The restaurant's CCTV captured the lady, sitting in the front of the taxi using her pre-paid debit card to pay the fare. She was handed a mobile terminal which she held in one hand and entered her pin using the other. "There, see," said the NAB manager, "She did not use adequate security measures, she should've covered the terminal so the taxi driver couldn't see her pin number. Her fault, we have no liability."

This sounds very strange! mastercard Australia has a blanket 'no liability' policy if you did not authorise a transaction. The only requirement being that you took reasonable care to prevent loss or theft. pretty sure Visa has the same policy. Strange the credit card didn't contact the lady given the high number of transactions.

As for consumer law more generally... we aren't too bad here in Australia. But we are lacking when it comes to commercial aviation protections. But there are people who genuinely fear that blanket protections such as they have in the EU will drive up fares. Even on the matter of agency refunds and cancellation fees during covid... some genuinely believed travel agencies should have been allowed to charge $350 because 'they did work'. I guess maybe it depends partly on whether you are 'pro-business' or 'pro-consumer'.

 

[Brissy1]

This sounds very strange! mastercard Australia has a blanket 'no liability' policy if you did not authorise a transaction. The only requirement being that you took reasonable care to prevent loss or theft. pretty sure Visa has the same policy. Strange the credit card didn't contact the lady given the high number of transactions.

As for consumer law more generally... we aren't too bad here in Australia. But we are lacking when it comes to commercial aviation protections. But there are people who genuinely fear that blanket protections such as they have in the EU will drive up fares. Even on the matter of agency refunds and cancellation fees during covid... some genuinely believed travel agencies should have been allowed to charge $350 because 'they did work'. I guess maybe it depends partly on whether you are 'pro-business' or 'pro-consumer'.

True "they did work" so if the airline cancelled the flight, who should pay them for that work?

 

[MEL_Traveller]

True "they did work" so if the airline cancelled the flight, who should pay them for that work?

That's entirely up to the travel agent to sort out with their partners... whether that's the airlines, hotels, tour companies. Travel agents are not our agent, they are agents for the travel providers. Agents take commission on everything they sell. Why not get the airline or hotel to refund the full cost to the traveller, and still pay the commission to the agent?

There are always going to be risks when it comes to running a business. If travel agents want 'risk free' - getting to keep their commission no matter what - why take it out on the end consumer?

 

[RAM]

This sounds very strange! mastercard Australia has a blanket 'no liability' policy if you did not authorise a transaction. The only requirement being that you took reasonable care to prevent loss or theft. pretty sure Visa has the same policy. Strange the credit card didn't contact the lady given the high number of transactions.

As for consumer law more generally... we aren't too bad here in Australia. But we are lacking when it comes to commercial aviation protections. But there are people who genuinely fear that blanket protections such as they have in the EU will drive up fares. Even on the matter of agency refunds and cancellation fees during covid... some genuinely believed travel agencies should have been allowed to charge $350 because 'they did work'. I guess maybe it depends partly on whether you are 'pro-business' or 'pro-consumer'.

Not so sure, other than Apple, that we do well on consumer rights. For example, live example at that, I discovered that the Federal Govt comparison site for electricity is being 'used' by a number of power providers. So I rang each, and gradually got upgraded to who I dealt with. In one instance the senior mgr admitted I was correct but that's just how things are.

Such as not providing the actual prices/fees charged for the plan named but using another ones lower charges. Links to terms & conditions going to the home screen, specific T&Cs for plans not existing at all on the company's website, company refusing to name the charges or how they arrived at the 'savings' quoted; "We don't have to do that".

So rang ACCC to lodge formal complaints together with phone records to substantiate times & length of calls to the different providers. Told no we don't deal with problems about misleading or deceptive practices with that site or companies linked to it - thats the Fed Govt, you need to call (& dept escapes me).

So rang that Fed Govt dept, 'They're out. Will get them to call back.' You can guess what happened (or didn't). Rang them again, etc etc. Finally spoke with CSA who will pass on the information to the relevant area (would not say who that was). Sometime later got a generic email saying that they monitor the site & it is fine.

So ring again, reference email & that it does not address my substantiated issues (took screen shots etc).

Finally spoke to a man who said I was wrong about my claims. Ok I said, can you show me where I went wrong then. Let's try using the site with my inputs (address, usage etc). No, take it from me the site is correct. After a little discussion he decided to humour me.

Entered my details etc, & got the exact same 'fake' results, clicked on the links (as described in complaint) & they didin't work (1 case) or took you to the home screen of the provider. "Hmm, that's odd!" REALLY!!!

Ok, I helpfully suggested why don't you type the serial number of the offer (mandatory on Fed Govt site) and do a search on the provider's site for the T&Cs. He did & nothing came up, that is not just no T&Cs - nothing at all came up. However if you clicked on 'accept offer' you went straight to a page to fill in a few extra details.

So, took him through another provider with significant issues (aka breaking the law). 'Hmm, never came across that before, I'll look into it and get back to you."

Three weeks later - nothing. So I call again, and as I managed to get his name out of him 'So I could lodge a vote of thanks for his efforts' - I asked to speak with him. First - no you did not speak with me. Actually yes I did, remember 'lodge a vote of thanks'. Then 'Oh, now I remember. I never said I would get back to you. We never respond to the public.

Get the picture.

Outcome. 'We contacted the providers you mentioned and they said it was due to something that they'd updated a couple of days before.'

Hold-on - I screen shot these issues more than ten days earlier. Not having anything about the plan offered on their website is not a small update issue. The screen shot for that company has the date last changed for the 'Offers Page' actually shown at the bottom right of the page - that data was 1 July 2019. So they misled you as that was months not a couple of days ago.

Ultimate outcome: "Thanks for you time bringing this to our attention. I'll revisit that company but will not be contacting you about the outcome".

Good consumer protection - I don't think so!

Back to the unfortunate lady & the taxi scam

It was a NAB issued prepaid Debit card using MC.

NAB bank manager stated that she hadn't taken reasonable care - holding mobile terminal in one hand & using other to enter PIN. She should have used her third hand to cover the keyboard...

This is perhaps an explanation of why (if you look at MC, Visa and a number of banks) there were a number of political donations made by them in the early 2000s prior to the change in the legislation that allowed them to make the onus of proof on the cardholder & force people to use a PIN while removing the option to verify by signature.

For some strange reason - there were no further political donations by Visa nor MC nor most of the banks - in the FY after the legislation was changed. Just a coincidence of course - not pay for play or anything like that.

 

[MEL_Traveller]

This is probably a bit OT... but since it's here anyway...

RAM - I believe the bank manager erred. If you know the lady concerned, I would suggest getting the matter escalated.

A quick search reveals: Personal Transaction and Savings Products

Note the onus of proof is still on NAB:

The accountholder will be liable for losses resulting from unauthorised transactions as provided below:​

​

(a) where NAB can prove on the balance of probability that the user contributed to the losses through the user's fraud or contravention of the security requirements in clause 39.4, the accountholder is liable for the actual losses which occur before NAB is notified that the security of the authentication service and/or password has been breached; and​

And the relevant 39.4 says:

39.4 User's responsibilities under the ePayments Code​

​

(a) Where NAB provides the user with an authentication service and/or password the user must not:​

​

(i) voluntarily disclose the authentication service and/or password to anyone including a family member or friend, except when you are creating an authorised user;​

​

(ii) act with extreme carelessness in failing to protect the security of the authentication service and/or password; and​

As I said... i think the bank manager may have erred. Together with a police report etc, I think this should be escalated. 'Extreme carelessness' seems a pretty high bar.

 

[RAM]

This is probably a bit OT... but since it's here anyway...

RAM - I believe the bank manager erred. If you know the lady concerned, I would suggest getting the matter escalated.

A quick search reveals: Personal Transaction and Savings Products

Note the onus of proof is still on NAB:

The accountholder will be liable for losses resulting from unauthorised transactions as provided below:​

​

(a) where NAB can prove on the balance of probability that the user contributed to the losses through the user's fraud or contravention of the security requirements in clause 39.4, the accountholder is liable for the actual losses which occur before NAB is notified that the security of the authentication service and/or password has been breached; and​

And the relevant 39.4 says:

39.4 User's responsibilities under the ePayments Code​

​

(a) Where NAB provides the user with an authentication service and/or password the user must not:​

​

(i) voluntarily disclose the authentication service and/or password to anyone including a family member or friend, except when you are creating an authorised user;​

​

(ii) act with extreme carelessness in failing to protect the security of the authentication service and/or password; and​

As I said... i think the bank manager may have erred. Together with a police report etc, I think this should be escalated. 'Extreme carelessness' seems a pretty high bar.

This was back in early 2000s.

The CCTV footage showed her not covering the mobile terminal - so that was the 'extreme carelessness'. "You made no effort to cover the terminal."

Taxi ride was Friday afternoon. Prepaid debit card run down to zero in Melbourne (she being in Sydney) on Saturday & Sunday (quite a feat). She went to use card on Monday morning (as she worked all Sat & Sun as well as Friday night). So zero balance left when she went to NAB.

She filed a police report & was told that there was nothing that could be done (as was the restaurant owner who could not believe the injustice). Police said although it was certain that the taxi driver provided the details to Melbourne taxi drivers - it could be quite hard to prove & honestly it would get shelved by the beancounters. Which is exactly what happened btw.

She tried disputing it with the NAB (with restaurant owner's support) & again informed your loss. Could dispute it in Court but if you lose then....

So she gave up.