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Martin, David

McDonnell, Siobhan

English

The Australian National University

152 Competition and consumer issues for Indigenous AustraliansPossible breaches ofthe TPAa p p e n d i x2Siobhan McDonnell and David MartinPossible unconscionable conduct(ss. 51AA; 51AB)Arguments as to whether transactions entered into by Indigenous consumers areunconscionable must take account of both Indigenous agency and the oftenheightened vulnerability of Indigenous consumers relative to other consumers.While Indigenous consumers do not constitute a class of ‘special disability’, ingeneral Indigenous consumers, and particularly those in remote communities, aremore likely to have lower levels of education, literacy and consumer awareness thannon-Indigenous consumers, and be less able to access to independent legal advice(Amadio). In addition, Indigenous consumers in remote areas are likely to be moredependent on single providers of goods and services, such as community stores.! Overcharging for taxi services and alcohol—The literature containsallegations that taxi drivers overcharge for services to town camps around AliceSprings (Commonwealth Ombudsman 1997). In addition, the CommonwealthOmbudsman (1997) also notes instances of Indigenous people beingovercharged for alcohol. Further anecdotal evidence exists of the practice inthe Northern Territory of the price of alcohol being increased dramatically tocoincide with days on which welfare payment are made. Moreover, mechanicalrepairs for cars have also been identified as being priced at above market ratesfor Indigenous consumers (Cultural Perspectives 1998). It is recognised thatwhile overcharging for goods and services is itself not a TPA issue, evidencethat overcharging is directed towards Indigenous consumers may besuggestive of a relationship of vulnerability consistent with unconscionability(see Altman, McDonnell & Ward 2001: 10, and chapter 1 of this volume). Thefact that these practices are directed towards Indigenous consumers, and aredifferent to the services offered to non-Indigenous people may be indicative ofan unconscionable practice.  Such an interpretation would be consistent withs. 51AB(2)(e) under which ‘the amount for which, and circumstances underwhich, the consumer could have acquired equivalent goods or services fromanother party’ will be taken into account in assessing whether a transactionwas unconscionable.153Competition and consumer issues for Indigenous Australiansa p p e n d i x 2! Used-car dealers—during fieldwork a number of Indigenous and non-Indigenous people interviewed (including representatives of various consumeragencies) indicated that Indigenous people were often sold cars at significantlyabove market rates. In particular, a number of people gave accounts of car-dealers (both registered and unregistered) bringing cheap cars over the borderin anticipation of royalty payments being made, and then selling these cars toIndigenous consumers at much more than their market value. In Alice Springsthere were also accounts of a number of people, including art dealers, runningsmall unregistered used-car businesses aimed at the Indigenous market as ameans of supplementing their income. Two key consumer reports also noteinstances of cars being sold to Indigenous consumers at prices that are double,or triple their market value (Bell & Johnson 2001; CommonwealthOmbudsman 1997). In addition, in interviews conducted during fieldwork anumber of people told of individuals who brought cars over the boarder intothe Northern Territory to coincide with royalty payments being made tocommunities. These cars were then sold at rapidly inflated prices.Cars are particularly prized possessions in remote communities. Elsewhere in thispaper it has been argued that the value Warlpiri men, for example, accord to carsis not constructed against that of the regional used car market, but in terms of theirrole in the primarily masculine pursuits such as hunting, attendance at ceremonies,and visiting kin across a huge region. Thus it may be that Walpiri males’ demandfor used cars is more inelastic than non-Indigenous consumers’ demand for cars.While on the one hand the ability of used-car salespeople to exploit the moreinelastic demand curve of Indigenous consumers could be considered goodbusiness practice, the fact that evidence exists of Indigenous people paying morefor used cars may also be indicative of unconscionable conduct.! Book-up (or book-down) practices—one interpretation of book-up practicesis that they result in exploitation of Indigenous consumers’ lesser bargainingposition and as such may be unconscionable. For example, in accordance withthe factors specified in s. 51AB(2) it could possibly be argued that anIndigenous consumer who enters into a book-up arrangement, who has lowlevel of literacy and education (s. 51AB(2)(a)) and who is pressured into usingbook-up arrangements on the basis that there are no other financial servicesavailable to them and they were hungry and needed food (s. 51AB(2)(b)) andwho is required to leave their key-card and PIN-number as security(s. 51AB(2)(c)) may be unconscionable. This is particularly the case if the feescharged for book-up are exorbitant compared with the fees charged for otherfinancial services (s. 51AB(2)(d)). This last point however assumes thatIndigenous consumers have access to credit from alternate financial sources, anassumption that can be problematic particularly in remote areas. Following onfrom this point, another possible interpretation of book-up is that it providesan essential service to Indigenous people who otherwise would not haveaccess to credit. Thus it is possible that in some cases book-up has thepotential to benefit Indigenous consumers (for a more detailed discussion of154 Competition and consumer issues for Indigenous Australiansa p p e n d i x 2book-up see Altman, McDonnell & Ward 2001: 12, and chapter 2 thisvolume).! Book-up and alcohol consumption—a recent report (Martin 2002) indicatesthat in communities in Western Australia, publicans are taking key cards andPIN numbers in return for providing people with alcohol. Evidence exists of asingle publican at Kookynie holding onto the cards of 200 Aboriginal people.Such transactions seem particularly unconscionable where people are alcoholdependent and thus particularly vulnerable to being pressured into using book-up arrangements in order to purchase alcohol. Finally, it should be noted thatselling alcohol on credit may be in breach of the store’s licence to sell alcohol,as is the case with many of the alcohol licences issued in the Northern Territory.Such matters however are more properly in the province of the relevant liquorlicensing agency than that of the ACCC.Possible misleading and deceptive conductand/or misrepresentation (ss. 52; 53).The issues detailed below seem to indicate that many Indigenous people, andparticularly those located in rural and remote areas, are vulnerable to misleadingrepresentations made during face-to-face transactions. This may be due in part tothe high levels of illiteracy amongst the Indigenous population in rural and remoteAustralia.! Door-to-door sales—TPA investigations to date seem to identify thatIndigenous people may be particularly vulnerable to representations made bydoor-to-door salespeople (see Altman, McDonnell & Ward 2001, and chapter2 of this volume). In addition, a recent Queensland Legal Aid report (2001) onCape York Indigenous communities offers further examples of Indigenousconsumers’ vulnerability to representations made by door-to-door salespeople.Accounts within the report suggest that a travelling salesman sold vacuumcleaners on hire purchase agreements for $3000 each to a number of womenlocated in remote Indigenous communities. Payment for the vacuum cleanerswas arranged through a finance company.! Mobile phones—during fieldwork interviews a number of people gaveaccounts of mobile phones being sold to Indigenous people who, uponreturning to the remote community in which they live, realise that the phonedoes not work as they have no coverage. For example, during interviews anumber of Indigenous people commented that during trips to Alice Springsthey had purchased mobile phones because of signs saying ‘free phone’ orbecause the salesperson had told them they did not have to pay for the phone.People were then asked to sign contracts. Problems with mobile phones arecompounded when phones are paid for using automatic deductions from a155Competition and consumer issues for Indigenous Australiansa p p e n d i x 2consumer’s account. Thus a consumer may be having a service fee deductedfrom their account for a phone that they cannot use. A recent ACCC (2001)investigation against Total Communications details some of the problems thatcan arise in the purchase of mobile phones when the terms and conditions ofthe contracts are not fully disclosed (ACCC 2001).  However, in the scenariodetailed above even if the terms under which the phone was purchased arenot considered a breach, it is likely that representations suggesting that thephone was free, if found to be inaccurate, would be.Possible abuse of market power! Monopoly selling—where stores, retail outlets or taxis hold peoples’ bankcards, as a form of book-up, this may create a monopoly (CommonwealthOmbudsman 1997; Westcombe 1998). This is because people whose cards arebeing held cannot purchase food or goods from other stores and thus becomea captive market. Such a monopoly restricts competition and may be an abuseof market power in accordance with s. 46 of the TPA.! Market sharing agreements—evidence gathered from one communitysuggested a market sharing arrangement such that one store sold sportinggoods and clothing while another store sold petrol and goods to tourists. It isunclear how extensive such agreements are, whether they operate to thedetriment of consumers, or whether examples of similar arrangements exist inother communities. If it could be established that market sharing arrangementswere in operation then they may be in breach of s. 45 of the TPA.Possible breaches of specific provisions! Credit cards—during interviews in two communities accounts were given ofunsolicited credit cards being sent to people for amounts of money that theyprobably had no capacity to repay. We were told of one Indigenous couplewho were receiving welfare payments and who had been sent a credit cardwith a $1000 credit limit. The couple had quickly spent the $1000 and werenow trying to manage the debt on their welfare payments. This practice wouldseem to be in breach of s. 63A of the TPA.! Letter scams—letters are being sent to Indigenous people in remotecommunities detailing winnings and asking for a payment to be sent. Duringfieldwork in Aurukun, David Martin was shown a letter that offered a prize inreturn for money sent overseas. These letters clearly involve misleading anddeceptive conduct, and so would breach s. 52 of the TPA. In addition, lettersthat offer gifts or prizes with no intention of providing them breach s. 53C ofthe TPA.

Possible breaches of the TPA

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Possible breaches of the TPA

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