LAURA TCHILINGUIRIAN:
It’s a new year and you probably have a resolution to get in shape and eat healthier. You may have even signed up to your local gym or subscribed to a healthy meal service. But have you ever done that in years gone by and then found it really hard to get out of it, to cancel your membership or subscription? It’s a bit of a dodgy practice, it’s known as a subscription trap and we’re being urged to check the fine print before signing up to any new service, especially at this time of the year. A recent study by the Consumer Policy Research Centre has found that 75 per cent of Australians have had a negative experience when trying to cancel a subscription, while 32 per cent have felt pressured into keeping a subscription they wanted to cancel. To talk more about these practices, we’re joined by the Assistant Treasurer and Minister for Financial Services, Stephen Jones. Happy new year, Minister.
STEPHEN JONES:
Same to you, Laura, and your listeners. Good to be with you.
TCHILINGUIRIAN:
Now, last year, the government consulted on ways to stop these unfair trading practices. What stood out to you from the consultation process?
JONES:
How prevalent they were, and how many Australians had found themselves caught up in what we describe as unfair and dodgy practices. In your intro, you talked about people signing up to a streaming service or a gym subscription or a meal delivery service. Often they’ll have a one- or 2‑week free trial period. It clicks over, and very, very difficult to get out, or they’ll often rely on just the passive behaviour of somebody forgetting that they signed up to something in the first place. Easy to sign up to, often very, very difficult to get out of.
TCHILINGUIRIAN:
Yeah. How is the government hoping to crack down on these practices?
JONES:
We’re going to make some changes to the Australian competition and consumer law to fill out the current prohibitions on unfair trading practices. We’ll have a general prohibition on unfair trading practices and we’ll spell out some specific ones, including subscription traps and what we call drip pricing. That’s where you go online to buy a concert ticket or an airfare, and it’s advertised at one price, but you’re just getting all these junk fees added on top of the advertised price, and you find yourself paying an inflated amount. So, there’s a bunch of different practices that we’ve identified as highly unfair. They’re driving consumers nuts. Australians are already doing it tough, they don’t need these sort of unfair practices which are ripping them out of millions and millions of dollars.
TCHILINGUIRIAN:
Now, the consultation process. Did you speak with organisations or businesses who are accused of this sort of behaviour?
JONES:
We’ve invited submissions from everybody. So, whether you’re a business or whether you’re a consumer group or whether you’re just an average everyday Australian who’s had some experience with these things, we wanted to hear from everyone. And, you know, often we’ll get the defence –
TCHILINGUIRIAN:
But did you hear from any of them?
JONES:
Yeah, yeah, of course. Of course, we have. And often you’ll get the defence from business, well, these aren’t unlawful practices, they’re perfectly legal. And it’s true, a lot of them are legal in Australia but illegal in other countries around the world. And we’re going to bring Australian laws up to scratch and ensure that they’re brought into the same sort of standards that many of these businesses are operating in – under in other countries.
TCHILINGUIRIAN:
And you mentioned the drip pricing as well. Will the legislation work only on Australian businesses, or will it be able to help protect consumers from international online retailers?
JONES:
So, businesses operating in Australia. We can’t have a situation where the laws of Australia stop at the internet. So, if you’re, irrespective of where you’re based, if you’re operating in Australia, then these laws will have a bearing upon you as a business.
TCHILINGUIRIAN:
So, what sort of penalties are you considering here?
JONES:
The sorts of penalties that exist within the Australian Consumer Law are in the tens of millions of dollars, so they’re quite substantial fines. That’s not the fines that we want to collect, by the way. It’s the change in practices that we want. But yes, they are substantial fines to ensure that there is a proper disincentive for businesses doing the wrong thing.
TCHILINGUIRIAN:
Have you considered what other countries are doing and who’s doing it well?
JONES:
Yes, we have. We’ve looked at similar laws that operate in parts of the US, in the European Union, in the UK and Japan and other similar sorts of advanced economies. And we’re looking at picking up the best of what’s operating in other countries around the world.
TCHILINGUIRIAN:
Now, the key question, I guess, Stephen Jones, is that a federal election is due in a few months time. We don’t know. It could be in 3 months, it could be in 5 months. When would you like to introduce this legislation and will it become law before a federal election?
JONES:
Unlikely that it’ll get done before the election just because of the normal process we go through. We will have some draft legislation out in the coming months, and we’ll get feedback on that. Then, the law’s on to parliament. We may be able to get it done before the election, but I’ll be surprised if we do. But what you can be sure is if we’re re‑elected, this will be a core part of our commitment for Australians to ensure that they can help manage their budgets and their cost‑of‑living pressures. Whether it’s subscription traps or drip pricing or some of these sort of unfair dynamic pricing arrangements, we’re targeting a bunch of practices that we think are just ripping Australians off.
TCHILINGUIRIAN:
And, Minister, just before I let you go, the New Orleans attack, we’re reporting on that.
JONES:
Horrible. Absolutely horrible.
TCHILINGUIRIAN:
Looking at ISIS and the protections that are in place or the investigations that are ongoing, what are you thinking from this point of view?
JONES:
Obviously, we’re getting advice from our security agencies and they’re tapped into all of the security intelligence that we get from our Five Eyes partnership. So, you would not expect me to discuss all of these sorts of things, but your listeners can be assured that we’re getting regular briefings, and acting on those briefings if we get a recommendation from a security agency, then we’ll be putting that into place to ensure that we can keep Australians safe. But today, our thoughts are with the victims, the families and the community that many Australians have gone on holidays in New Orleans and probably visited the spot where this horrific incident occurred. And, you know, quite triggering for a lot of us, but our thoughts about the families and the communities impacted.
TCHILINGUIRIAN:
Minister, thank you so much for your time.
JONES:
Good to be with you.