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Complaints initiative faces backlash over ‘unfair’ outcomes for agencies

Complaints initiative faces backlash over ‘unfair’ outcomes for agencies

An initiative to provide better customer service and help consumers make more informed decisions is set to be introduced in New South Wales this week. However, the Real Estate Institute of NSW (REINSW) believes it will unfairly tarnish reputable businesses.

The NSW Fair Trading Complaints Register, which is due to come into operation on Wednesday, August 24, will provide information about businesses that are the subject of 10 or more complaints to NSW Fair Trading in a calendar month, and will be published monthly.

Fair Trading commissioner Rod Stowe says that in recent months his agency has been engaging with traders who had previously recorded high levels of complaints and they’ve already seen some impressive improvements.

“Several businesses have already taken steps to avoid appearing on the register, including allocating more resources to dispute resolution and inviting Fair Trading to conduct training programs for their employees.”

REINSW president John Cunningham says the register will list businesses under their public and recognisable “trading” or “brand” name, which means that franchises or brand co-operatives will be grouped together instead of as the individual businesses they are.

“As a result, the register will simply be full of franchises and groups who, due to the popularity of their brand and their sheer size, will almost always have 10 consumer complaints per month.

“While the real estate industry wholeheartedly supports the concept of a complaints register, we believe the NSW consumer watchdog has poorly executed what is essentially a good idea – a complaints register to ‘out’ poor traders.

“NSW Fair Trading has failed consumers in the creation of this initiative and has missed an opportunity to use data in an effective way for the benefit of consumers.

“To have this register effectively target the major brands is simply unjust and needs to be remedied urgently.

“Small businesses with exemplary records, operating under franchise or co-operative brands, will be impossible to distinguish from those who have been identified as poor traders given all businesses operating under a brand will be grouped together.”

The “false and misleading” information could, Cunningham says, be used to discredit businesses who demonstrate responsible business practices and innocent parties could be disadvantaged.

“NSW Fair Trading has been negligent and reckless to apply a product-based system to the service industries of NSW, thereby unfairly discrediting good businesses and, as such, is acting as one of the worst discriminators in NSW,” he adds.

“The consumer will naturally gravitate to the agent that does not appear on the register due to the misleading information provided by NSW Fair Trading.

“The issue could be simply rectified by providing accurate and helpful information to the consumer by treating businesses as individuals rather than trying to lump large groups under one umbrella.

“It is not too late to remedy this issue and REINSW calls on Minister for Innovation and Better Regulation Victor Dominello to right this wrong.”

The commissioner says the register is a big win for consumers.

“This greater transparency gives consumers a more informed choice before they buy and traders who find themselves on the register will have a strong incentive to improve business practices,” he explains.

“The register is a tangible example of the government’s open data policy, which is intended to place government-held information into the public domain.”

In response to the REINSW comments, Stowe says: “NSW Fair Trading defends the decision to aggregate data under the overarching brand name for retail groups and franchises.

“This is the name these traders use when promoting their businesses to the public and this is the name consumers identify with when making a transaction.

NSW Fair Trading contacts all businesses before they are published on the register and has successfully engaged with numerous organisations to encourage better business practices in all of their branches and franchises.

“It should be noted that in the upcoming Complaints Register there are a range of traders listed, not only businesses that operate on a franchise or branch model.”

The guidelines, which outline how the register will operate, have been endorsed by the Information, Small Business and Customer Service Commissioners and appear on the Fair Trading website.

 

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