The Australian Consumer Law

The Australian Consumer Law focuses on unfair contract conditions, consumer rights while purchasing products and services, product safety, legislation for unsolicited agreements and penalties. The case "Australian Competition and Consumer Commission v Empower Cornerstone Investment Aust Pty Ltd (in liq) (No 4) [2018] FCA 1408” depicts the unfair trade practices which were against the law. The actions were taken by the Australian Competition and Consumer Act 2010 for providing protection to the people of the society (austlii.edu.

Case study

Table of Contents
Introduction...............................................................................................................................2
Main Context..............................................................................................................................2
Legal and professional jurisdictions.......................................................................................2
Organizational, social and cultural factors.............................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................9
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Introduction
Australia Consumer Law provides protection to consumers from unsafe products, scams and
unfair trade practices carried out by the organizations. The law includes a wide range of
protections which assists consumers in purchasing safe products and services. The
Australian Consumer Law focuses on unfair contract conditions, consumer rights while
purchasing products and services, product safety, legislation for unsolicited agreements and
penalties. The consumers have the right to take legal actions against an organization for
providing inappropriate products and services. The Australian Competition and Consumer
Commission are considered to be an independent Commonwealth statutory authority which
plays a significant role in enforcing the Competition and Consumer Act 2010. It also consists
of legislation, regulating infrastructure, fair trading and promote competition for the benefit
of all the people in Australia. The case "Australian Competition and Consumer Commission v
Cornerstone Investment Aust Pty Ltd (in liq) (No 4) [2018] FCA 1408” depicts the unfair
trade practices which were against the law. The actions were taken by the Australian
Competition and Consumer Act 2010 for providing protection to the people of the society
(austlii.edu.au, 2018). The implementation of rules and regulations for the protection of the
consumers is considered to be a social worker.
The ethical rules and regulations need to be followed by an organization and people within
the community. The democratic principles and values embraced by the Australian
Association of Social Workers are being explained in the constitution of AASW (2008) (Aasw,
2010). The principles and values are as follows:
 Complying with the code of ethics
 Believing in equal rights for all human beings
 Commitment to plural democratic community with equal opportunity and equality
as per the law
 Respecting other including fairness, justice, justice, and compassion
 Accepting the uniqueness of people
 Belief in collaborating the cornerstone of practice
 Valuing communities and families as social structures importance to well being and
functioning of society and individuals
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 Positive changes in the development and growth of human beings
 Individual choice and collective and personal responsibility
 High-quality provision for social work service
 Valuing difference and diversity
 Promoting human rights
The ethical principles can assist the social workers to help people of the community in an
appropriate manner. The ethics are being explained clearly in the code of ethics of the
Australian Association of Social Workers.
Main Context
Legal and professional jurisdictions
The case shows inappropriate use of the VET FEE-HELP Assistance Scheme. Under the Higher
Education Support Act 2003, the program VET FEE-HELP was provided to students under
which they get loans for enrolling into the vocational training and education courses. The
applicants exploited as per Australian Competition and Consumer Commission and the
Commonwealth of Australia. The organization traded formally as the Empower Institute was
being approved as “VET provider” as per the clause 6 of scheme1 A of HES Act. Jim Yang was
the sole shareholder and director but in 2014, Dr. JooGim Heaney became the chief
executive officer. No claims were being against the senior executives in the proceedings
(Burrell &McGinn, 2009).
The applicants seek relief that rose from alleged conventions of sections 18,29 and 21of the
Australian Consumer Law. Section 29 and 18 prohibit deceptive or misleading conduct about
products and services and section 21 prevents unconscionable conduct. The alleged
contraventions of empowers were being challenged under section 74,76,75,79 and 78. The
record of empowering depicted that 8425 students completed their course during that
period. It represented that less than one percent of those students who got the loan from
the scheme were being enrolled in the course. An amount of $64188285.90 was being
received as payments from VET FEE-HELP. The figure depicts wastage of government funds
because million of money was received as debt but did not achieve the educational
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outcomes. The waste has occurred because the Commonwealth made huge payments on
the basis of the enrolments to Empower (Clarke &Erbacher, 2018).
At the time of the enrolment, the students were not able to complete the courses because
the candidates were not suitable or not have the required skills of completing it. Empower’s
enrolment and marketing process involved a pattern of behavior or system of conduct that
was unconscionable in contravention as per section 21 of Australian Consumer Law. The
recruiters and employees were able to increase their financial benefits obtained by
Empower and enrolling the students into the course. The recruiters of Empower made
misleading and false representation to the students. The students were told that the course
would be free and they will also receive a free laptop as well. The recruiter of the Empower
also provided cash for signing up the course. I found that the course was not free because
the students who signed up incurred a debt of around $15000. The recruiters of Empower
were not able to explain adequately the incident (Corones, 2016).
The consumer evidence depicted multiple contraventions consisting of unconscionable,
deceptive and misleading provisions and unsolicited agreement provisions. It depicted
multiple instances where the consumers were affected because they incurred debts to the
Commonwealth. Empower carried out a system or engaged into a behavior pattern
consisting of recruiters who were not trained practically and remunerated on the basis of
commission for securing ennoblements, offered inducements and made an unsolicited
agreement with the consumers. Empower offered computers to the students who enrolled
in the courses. Incentives were also being offered by Empower in the form of gift vouchers
of amount $100 (Harvey, 2017). Empower also paid commissions to the senior employees
on the basis of the recruitment of the students. Empower used marketers to recruit and
market students. Inwork and Amity, the two marketers were engaged brokers who recruited
and marketed students.
Empower provided no practical training to the recruiters consisting of no training as per the
Australian Consumer Law. Section 21 (1) of Australian Consumer Law states that an
individual cannot commerce or trade in connection with supplying products or services to a
person or engaged in unconscionable circumstances (Harvey, 2009). The court can take legal
actions against any person or organizations that are engaged in appropriate business trade
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practices. Section 21 provides legislation for the individual who was affected by the behavior
or conduct. Paragraph 21 (4) (b) of Australian Consumer Law shows the intention of the
parliament that the provision can apply to examine whether or not the person was affected
by behavior or conduct. Section 22 (1) of the Australian Consumer Law provides legislation
for examining the purpose to determine whether an individual has violated section 21 in
relation to the supply of products and services.
The court can take the decision on the basis of the strength of bargaining positions of
customer and suppliers. The judgment can also take place whether the customers were
appropriately able to understand the documents related to the supply of the products and
services. It was also being examined whether there was any undue pressure or influence
that led to the occurrence of unfair trade practices. The applicants alleged contraventions of
section 21 (1) of the Australian Consumer Law consists of the operation of Empower of its
enrolment and marketing process and the conduct of recruiters to deal with the consumers.
The students who wanted to withdraw from the course were asked to submit an application
as per the law. Section 79(1) requires that the supplier under the unsolicited agreement
should ensure that the agreement was being negotiated and complies with requirements.
Section 78 (1) explains that if an unsolicited agreement was no being negotiated by phone
then the dealer who carried out the negotiation process should provide a copy of the
agreement (Kirton&Madunic, 2009).
Section 76 explains that a dealer should not make an unsolicited agreement with an
individual unless it is made before the agreement; it was made in the presence of both
person and dealer, an agreement made on the phone and other forms. Section 74 and 75
(1) explains that a dealer who calls at any premises to a person for the purpose to negotiate
the unsolicited agreement with the consumer. Section 70 (1) creates the rebuttable
presumptions that the agreement is considered to be the unsolicited consumer agreement
(Malbon&Nottage, 2013). Section 69 set out the description of the unsolicited consumer
agreement. It consists of four elements that are agreement is for the trade or supply of the
products or services, it is carried out as the consequence of negotiations between the
consumer and dealer, consumer did not invited the dealer for coming to the place for the
objective to enter into negotiations and total price payable or paid under the agreement.
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The applicants complained that the recruiter did not inform the census date and there was
lack of appropriate process. The applicants alleged the method of marketing stating the fact
that there was a lack of intention of undertaking the courses during or before the process of
enrolment. The recruiters did not inform the content and nature of the course to the
students. The trade practices were carried out in an unethical manner which depicts the
violation of the Australian Consumer Law. The applicants claimed that they did not receive
adequate explanation or brief of VET FEE-HELP. There was much evidence on the basis of
which the judgment was taken for conducting an unfair business practice. The students
were told that the course is free which would be provided to them and free laptops were
also offered but none of the promises was right (Melton, 2010). The students were the
consumers who were being exploited by the recruiters adversely.
The complaints were registered to ACCC by Empower. The complaint consists of two things
that were the agent declared was representing the funded courses offered by the
government and the agent misleads students and carried out fraudulent activities. Empower
signed a sales/company representative agreement with the Active Group International. It
was being found that Mr. Yang and the Active Group misleading the consumers about the
VET FEE-HELP. Empower carried out verification in relation to the students who were being
enrolled in the courses. The applicants claimed that the employees and recruiter of
Empower made misleading or false representation. The evidence depicted that the students
were being enrolled in the courses by the salesman who was being called at their homes
(Musa, 2013). It was being found that the recruiters of the Empower recruited particular
targeted locations consisting of remote and rural communities and Indigenous people. Thus,
marketing methods were being used for recruiting employees. The Australian Consumer
Law was being violated by the recruiters associated with the scheme. The legal legislation
and rules were being used by the court for examining the case and also took actions against
the recruiters for providing protection to the vulnerable people.
Organizational, social and cultural factors
The statistical evidence depicted that the individuals from the social disadvantages areas
and Indigenous students were targeted particularly by the recruiters. The targeted people
were living in remote Aboriginal areas and public housing. Group sign-ups were being
conducted in homes and bars in different places. Unfair trade practices were being carried
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out for personal benefits. The recruiters cheated the students by stating that the course is
free as well as a laptop will also be provided to them. The students were being exploited
which is considered to be illegal as per the Australian Consumer Law. The targeted people
belonged to the low economic-socio status (Parkinson, 2013). The target demographic of
the employers was disengaged people of the community of all backgrounds and age group
who were eligible for the scheme. The applicants did not state there was any inappropriate
about the target demographic. The recruiters exploited people who had very low income
which is considered to be unethical. They targeted low socio status group because they
would not protest or have a lack of adequate knowledge. People from different
backgrounds were being exploited. The activity is depicting the exploitation of the people
living in the community with less income. Indigenous populations have no or little formal
school and get less chance of accomplishing high-level courses. Thus, the students agreed to
sign up the scheme in order to get the course in free (Thomas, 2010). However, they were
misguided and cheated by the recruiters.
The social workers are playing a significant role in improving the life of the people. They
help people and ensure equality within the community. The social workers also protect the
consumers by increasing their awareness about the products and services available in the
market. The social workers are also helping the aboriginals as they have inadequate access
to the necessary resources (Barnard, Horner & Wild, 2009). The students should be provided
with appropriate justice as per the law and it depicts the social work which needs to be
done for ensuring equality within the community.
Conclusion
The case has depicted the violation of Australian Consumer Law. The record of Empower
depicted that the students were being exploited by the recruiters with the help of VET FEE-
HELP. The students were offered free courses and laptops by the recruiters. The recruiters
carried out misleading and fraudulent activities because the students were not provided
with the facilities rather they were burdened with debts. Legal actions were being taken by
the law for violating the Australian Consumer Law. Unfair trade activities impose a
significant impact on the rights of consumers. Thus, Australian Consumer Law provides
protection to consumers.
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References
Aasw (2010). Code of Ethics. [online] Aasw.asn.au. Available at:
https://www.aasw.asn.au/document/item/1201 [Accessed 22 Mar. 2019].
austlii.edu.au. (2018).Australian Competition and Consumer Commission v Cornerstone
Investment Aust Pty Ltd (in liq) (No 4) [2018] FCA 1408 (19 September 2018). Retrieved
from https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2018/1408.html?
context=1;query=consumer%20;mask_path=
Barnard, A., Horner, N., & Wild, J. (2009). The value base of social work and social care (3rd
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Burrell, D., &McGinn, J. (2009). Cornerstone law series (5th ed.). [Adelaide]: Law Society of
South Australia.
Clarke, P., &Erbacher, S. (2018). Australian Consumer Law (4th ed.). Sydney: Thomson
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Corones, S. (2016). Australian Consumer Law (4th ed.). Sydney: Thomson Reuters
(Professional) Australia Pty Limited.
Harvey, C. (2009). Cornerstones of Australian law (4th ed.). Prahran, Vic.: Tilde University
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Harvey, C. (2017). Foundations Of Australian Law (5th ed.). [Place of publication not
identified]: TILDE UNIV PR.
Kirton, J., &Madunic, J. (2009). Global law (3rd ed.). Farnham: Ashgate.
Malbon, J., &Nottage, L. (2013). Consumer law & policy in Australia & New Zealand (2nd
ed.). Annandale, N.S.W.: Federation Press.
Melton, B. (2010). The law (4th ed.). New York: Chelsea House Publishers.
Musa, S. (2013). Reflections on Global Law (5th ed.). MartinusNijhoff Publishers.
Parkinson, P. (2013). Tradition and change in Australian law (4th ed.). Pyrmont, N.S.W.:
Thomson Reuters (Professional) Australia.
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Thomas, G. (2010). Cornerstone law series (6th ed.). [Adelaide]: Law Society of South
Australia.
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