Here’s a list of recent court cases where businesses have been penalised, and what to do if you are owed compensation or a refund:
2 Likes
What I’d really like to see raised as a starting point for Australian consumers from many concerned stakeholders (not just Choice), is that any penalties under existing legislative frameworks are not only enforced more often, but are increased to a meaningful level. Without the above changes the legislative framework is meaningless.
As I stated in another post if I am a business owner who makes $500,000 profit by doing the wrong thing (false advertising, dodgy products, etc), and the legislative body that covers my business catches me and fines me $10,000 which of the following do you think applies?
1 - I realise the error of my ways, pay my fine and forever more abide by the law, never to rip off a consumer again.
2 - I apologise to the powers that be, pay my fine and promise to amend my business culture and behaviour. I then go home to giggle and count the remaining $490,000 profit I made by my transgressions, immediately looking into how to make my next $500,000 but without getting caught!
If the penalties for bad behaviour were true penalties, they would scale in the order of magnitude for the monies made by the venture. For an instance like the above, the penalty could be 25% of the profit made ($100,00) plus the company being forced to refund all monies gained through the malpractice. This would mean a net loss of $100,000 to the business and no loss to their customers (the refunds being enforceable prior to the fine). Yes this would mean the business may become insolvent and forced to close, but you have to ask yourself should a business be allowed to operate if they are willing to rip off customers to make a profit? I know it worked for our banks that just happen to be guaranteed by the taxpayer (still no-one really held to account there), but no business should be allowed to operate in that way.
I know, I live in fairyland lol - it’s a nice place to be, you really should visit :). With our halls of parliament the domain of cashed up lobbyists the above is a pipe dream never to be fulfilled. These types of changes would need politicians of both courage and conviction, both extinct qualities in the corridors of Canberra. If you could somehow frame it in a way that convinced them there were votes in it for the next election you might actually get them to listen for a moment, but only until the next cashed up lobbyist waves some currency under their party treasurer’s nose lol
4 Likes
There is a precedent although probably not applied to corporate fines, but what a great idea.
https://www.weforum.org/agenda/2018/06/in-finland-speeding-tickets-are-linked-to-your-income/
3 Likes
Gross income or turnover might be a better choice for here, given how our tax system is manipulated?
3 Likes
In Australia, the courts can award up to ‘three times the value of the benefit received, or 10% of annual turnover in preceding 12 months, if court cannot determine benefit obtained from the offence.’
The three times the value of the benefit received is a big incentive for business not to misbehave in contravention of Australian Consumer Law, however, whether the courts award such a penalty is another matter.
It is worth noting that penalties being imposed against corporations has been increasing significantly over past years. This could be due to previous precedence being set as well as the prosecution requesting higher fines/penalties (which could be driven by government and consumer exceptions).
4 Likes
Perhaps at some point even blind Freddy and his cadre of blind advisors must have figured it out, although there still seem to be an abundance of token fines being reported for various and sundry. Many reports include the concept of not making the fine so big it would jeopardize the company. What message does that send?
2 Likes
Optimistic!
The contents of my glass still resemble the current drought. A long way from having sufficient water to secure the future.
2 Likes
Criminal charges brought against ex BlueScope manager:
5 Likes
I had to stop laughing before typing this - I was picturing the CBA getting hit with a penalty of 10% of annual turnover for their charges relating to the anti money laundering fiasco - laughing as in it’s never going to happen. They copped a fine of 700 million (agreed settlement) so some people will say they got hit hard - after posting a profit for 2019 of 8.5 billion following a 2018 profit of 9.2 billion. It wasn’t for one offence either - failing to properly monitor transactions on 770,000+ accounts over 3 years, almost 150 suspicious matter reports filed late or not at all and over 50,000 reports on transactions over $10,000 filed late. On top of that they breached their obligations on performing checks on 80 suspicious customers. The maximum fine per breach was around 18 million so the total (theoretical) fine could have been near 1 trillion. Too big to fail so no-one gets held to account, and they get hit with a fine so small their shares actually went up when it was announced!
Laws relating to business are treated the same as laws relating to the general public - the more money you have/make, the better the legal outcome for you. If I’m a retail or hospitality employee and steal $100 out of the till, the majority of the time I’ll be fired, charged and have a court date. If my retail or hospitality employer steals my wages (even if it’s in the thousands), they cop a puny fine, get to say sorry and pay the money back - seems legit!
If I run a family business/store, or am a self employed tradie and rip people off through shonky practices or products and get caught, they’ll throw the book at me. If I’m a national chain or enterprise that employs hundreds/thousands of people they are too scared of upsetting someone powerful and will ask if I mind getting my wrist slapped with a wet tissue before holding the door open for me to leave. Money talks in Australia (just like elsewhere) and the more you have the more those in power listen.
5 Likes
An interesting article regarding company directors in Australia.
On Landline yesterday, much to my surprise, Kerry Lonergan actually told a joke.
It was about 3 business people sitting in a jail cell.
The first said “I was charging more than my competitors. I was convicted for price gouging”.
The second said “I was charging less than my competitors. I was convicted for predatory pricing”.
The third said “I was charging the same as my competitors. I was convicted for price collusion”.
1 Like
