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Major consumer issues for 2010 and trends compared with 2009

In 2010 Consumer Protection
received a total of 139,798 enquiries from consumers and business operators (compared to 42,036 in 2009) and received 9,940 formal complaints (compared to 10,145 in 2009).

 

Retail & Services (including Travel):

Complaints relating to the selling of goods and provision of services, including product safety and travel, totalled 4,377 in 2010 (compared to 4,154 in 2009).  Enquiries totalled 24,492 in 2010 (compared to 24,763 in 2009).

Major issues in the retail area were triggered by sudden business closures and the impact it had on consumers.  Many consumers reported the loss of deposits they had paid up front for goods and
services and, in some cases, consumers had paid the full purchase price while waiting for goods to arrive or to secure goods into storage for future events.  This again prompted Consumer Protection to re-issue advice to consumers to pay the smallest deposit possible and never pay the full amount until the goods are delivered or the service completed to the consumer’s total satisfaction.  Significantly a number of business closures occurred where there were significant numbers of discount vouchers sold in the marketplace.  These vouchers were not honoured as a result of the
business closing down or new ownership not accepting responsibility for old ‘debts’.

In one major incident the Rick Hart stores, owned by the Clive Peeters Group, went into receivership in May and Consumer Protection received more than 500 calls from worried customers who had more than a million dollars paid as deposits at risk. In this case, there was a good outcome when the Receivers managing the affairs of the company were able to negotiate the satisfaction of outstanding orders.  Other business closures prompting calls and complaints were Baby World/Baby Boom, WA Institute of Beauty Therapy and Inspired Life gym, unfortunately in these instances a positive outcome could not be realised.

Disputes between consumers and retailers over warranties continued to be high with consumers
complaining that retailers were not meeting warranty obligations or were transferring their obligations to manufacturers.  There were high levels of complaints relating to electrical and computer equipment, whitegoods, mobile phones, clothing and furniture.

Consumer Protection recognised an increasing trend in the number of complaints against pet shops and breeders of pets of all types.  Investigations into the cause of these complaints and specific instances of misleading behaviour have been instigated.  Consumer Protection is
developing information and highlighting issues the consumers should be alert to when purchasing pets.

Complaints against airlines and especially those in the budget categories provided an insight into a growing trend of concerns about the additional charges incurred online such as booking, luggage and credit card fees. The Australian market is becoming more aware of the issuesrelating to travelling with budget airlines compared to full-service airlines and Consumer Protection highlights the need to be aware of extra costs relating to luggage, food and entertainment on these carriers as well as problems if the flight is delayed or cancelled and connections are missed.  Conditions of travelling on these airlines are specific in terms of check-in times and point to point travel rather than a ‘whole of journey’ so if consumers are planning on making connecting flights from one destination to another those terms and conditions can have a significant impact if connections are missed.

Scams:

Scams continued to be a major and increasing area of concern to Consumer Protection in 2010 with the number of reports totalling 7,050 (compared to 4,352 in 2009).  We believe this represents an increase in awareness of contacts that are likely to be a scam and more consumers are taking the time to report these matters. 

The techniques and methods used by overseas fraudsters, have become increasingly more professional, making it more likely to entice victims. 

The majority of scams encourage people to send money by wiretransfer which makes it impossible to trace and recover the funds.  Other scam types that encourage recipients to send amounts of money to recover so called prizes and merchandise rely on consumers thinking that it is only a relatively small amount of money (up to $100) but when this is multiplied across 100’s of recipients the level of detriment is clearly more serious.

Apart from a huge increase in scam reports, there have also been records set with regard to the individual amounts lost by scam victims.  In September, a Western Australian working in South Africa reported to us that he had his identity stolen and scammers sold his Karrinyup home, collecting the $485,000 proceeds from the sale.  It was also discovered that a second property in Perth was being readied for sale. This amount was eclipsed in December when a Perth woman
reported losing $600,000 in a romance scam.

Phishing scams seek personal details of recipients, including bank and credit card account information, they are as prolific as the scams that try to get the recipient to pay money upfront for a prize or gift that they have supposedly won.  Major scams in this area include cold
callers claiming to be from major computer companies, attempting to gain access to consumer’s
computers.  This particular scam is different to the norm in that the perpetrators actually telephone
consumers and talk them into superfluous computer services and have the victim pay on the spot by way of credit card deductions.

Scam letters from the EverMAS Travel Group in Malaysia containing fake scatchies promoting bogus prizes hit Perth mailboxes.  In one instance a Perth woman advised she had lost $50,000 in the EverMAS scam seeking to claim her promised winnings.  In cooperation with Australia Post, Consumer Protection has intercepted many of these scam letters, preventing them from reaching WA homes.

Reports of fake advertisements and supposed buyers on websites remained high in 2010 with online accommodation and car sales sites the major targets.  Warnings were also issued concerning a fake travel website.

Motor Vehicle:

Enquiries and complaints about the new and used car market remained fairly static over the year.  (1,373 complaints in 2010 -1,384 in 2009 and 11,092 telephone enquiries - 11,064 in 2009).

Concerns highlighted about new car purchases were contracts, delays in delivery and the customer not getting exactly what they ordered.  The principal area of complaint for used car purchases after sales breakdowns and the realisation that the vehicle purchased may have serious faults. 

Used motor cars are provided with a statutory warranty if the vehicle is less than 12 years old, has
travelled less than 180,000 kms and the purchase price exceeds $4,000.  Vehicles that are sold outside of these parameters must still be “fit for purpose” and safe to drive Consumer Protection deals with a number of complaints in this area every year.The hail storm in March gave rise to an increased level of disputation because of delays in completing
repairs. Further concerns have arisen because hail damaged vehicles have found there way back into the used car market through some unlicensed activities which has shown that some were also poorly repaired and subsequently resold to unsuspecting members of the public.

Small Building Works (fencing/Patios/floor covering):

The Building area was subject to 1,345 complaints in 2010 (compared to 1,157 in 2009) and 9,323 enquiries (compared to 8,010 in 2009).

There continues to be a high number of complaints against small contractors in the area of fencing, patios, air conditioning and timber flooring concerning incomplete work, unreasonable delays or
dissatisfaction with the quality of the workmanship or products supplied.  There was also an increase in enquiries/complaints about roof insulation and solar system installers.  Many of these issues were compounded by theI increase in activity in this area as a result of Government rebate schemes.

Tenancy:

Tenancy attracted 804 formal complaints (compared to 829 in 2009) and 50,254 enquiries
(compared to 50,133 in 2009).  The main issues in this area related to disputes over the termination of tenancy agreements, surprise inspections and confusion over who is responsible for repair or
maintenance items at properties.

An issue which continued in 2010 was the practice of some landlords and property managers demanding tenants give 21-days notice to terminate a fixed term tenancy agreement and subsequently seeking to impose a penalty on the tenant if it was not given.  This is illegal under the Residential Tenancies Act 1987   

Enquiries about bonds remained high but relatively static with 24,420 calls in 2010 (compared to 23,555 in 2009). 

One of the significant drivers in this area is the need for tenants to be provided with a refund of their bond money in a timely manner.  Tenants face huge costs when moving home with costs including paying rent in advance, a bond on another home, furniture removal and reconnection to utilities.  With the average bond being about $1,600 and rent in advance being $800per week. It is a substantial amount of money that must be found at relatively short notice.

Real Estate, Land Valuers & Settlement Agencies

This industry received 1,205 complaints in 2010 (compared to 1,125 in 2009) and 6,263 enquiries (compared to 7,193 in 2009).  These related to the use of money held in trust by real estate agents and property managers and the dissatisfaction of landlords with the quality of service offered by property managers.

Page last updated on:   -  Thursday, 28 April 2011