Productivity Commission flags higher fines for unsafe products, calls for states to give recall powers to ACCC
Updated
The maximum fines for retailers who sell unsafe products could be 10 times as high, according to suggestions from the Productivity Commission.
Key points:
- Productivity Commission calls for national approach to swiftly ban and recall unsafe products
- Recall powers currently lie with states and territories, system criticised as too slow
- Commission wants to implement national database of complaints and product safety incidents
The commission says the current fines of up to $1.1 million for a company are often "insignificant" when compared to the money made from the dodgy item.
It instead points to suggestions made by a consumer affair body which say the maximum fine be increased to $10 million, three times the profit made from the product, or 10 per cent of the company's annual turnover.
Fines for individuals who sell the items are also in their sights.
Penalties for breaching consumer law are currently $220,000 for an individual.
The Productivity Commission says that is too low, but stopped short of officially recommending new penalties.
Commissioner Julie Abramson said there was a strong case for increasing maximum financial penalties for both companies and individuals.
"When you look at the profits generated in terms of some of these issues, really the penalties have not kept pace after being set in 2011," Ms Abramson told the ABC.
"We really think that they need to be higher and there have been a number of commentators who've also made similar observations."
National database for complaints
The report also suggests states give up their power to recall faulty products and hand it over to the Australian Competition and Consumer Commission (ACCC).
"There are a number of regulators, including specialist safety regulators," Ms Abramson said.
"But what we're proposing is that it would be much clearer that it would be the ACCC's responsibility to respond.
"When a consumer buys a product, they actually buy a product that's distributed across Australia and that's why we think it makes sense to have it with the ACCC."
The move would give the national consumer watchdog, the ACCC more control to recall and deal with dodgy goods.
The commission says there should be a national approach to swiftly ban and recall unsafe products, such as the hoverboards, which have been linked to a number of house fires.
Currently, states and territories can call for an interim ban or compulsory recall in relation to unsafe product.
But in some cases the system has been criticised for being slow, and there have been instances where unsafe products have continued to be sold in some states while being banned in others.
"If it became a Commonwealth responsibility there would be much more clarity about what action needed to be taken," Ms Abramson said.
Complaints register
The Productivity Commission has also recommended a plan to implement a national database of complaints and product safety incidents.
It is unclear what information on the proposed database would be publicly available.
"There would need to be a whole lot of questions nationally looked into, on what basis would someone be put on the register and would they be named?" Ms Abramson said.
"There is also a few other models in terms of databases; the Financial Ombudsman also has one where you can look up a particular financial firm."
Topics: fraud-and-corporate-crime, business-economics-and-finance, law-crime-and-justice, australia
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