Latest / Early Edition with Ryan Bridge / Alex Sims: Auckland University Professor on whether Labour's fees policy will make a difference

Transcript

Alex Sims: Auckland University Professor on whether Labour's fees policy will make a difference · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Right, let's talk about what's going on with the Labour
• 0:02
  Speaker 1: Party campaigning on getting rid of hidden fees.
• 0:05
  Speaker 2: Some of these will be outright banned and the other
• 0:07
  Speaker 2: solutions include transparency measures which will make it easy for
• 0:11
  Speaker 2: people to see what they're going to be overcharged if
• 0:13
  Speaker 2: they sign up for those products.
• 0:14
  Speaker 1: So they want to make... subscriptions like your gym membership
• 0:17
  Speaker 1: easier to cancel, ban junk car insurance, outlaw retailers pressuring
• 0:23
  Speaker 1: shoppers to take on extended warranties, all this stuff. Alex Sims,
• 0:26
  Speaker 1: Auckland University Professor, Department of Commercial Law with me this morning. Alex,
• 0:29
  Speaker 1: good morning.
• 0:31
  Speaker 2: Good morning.
• 0:32
  Speaker 1: Is this practical?
• 0:36
  Speaker 2: That's a good question. In theory it is, but in practice,
• 0:42
  Speaker 2: I mean, we have a whole lot of really strong
• 0:43
  Speaker 2: consumer laws that often get ignored. So it's almost like,
• 0:48
  Speaker 2: what's the point of adding new laws if you're not
• 0:50
  Speaker 2: enforcing the current laws?
• 0:52
  Speaker 1: Which ones aren't we enforcing at the moment, Alex?
• 0:57
  Speaker 2: Well, for example, unfair contract terms. I've done one study
• 1:02
  Speaker 2: and been involved with another study where every single contract
• 1:06
  Speaker 2: had unfair contract terms. Things like, you know, we can
• 1:08
  Speaker 2: change the contract, any part of it at any stage
• 1:12
  Speaker 2: and things like that, which are there. The MB, Ministry
• 1:16
  Speaker 2: of Business and Information and Employment, know that they're there.
• 1:19
  Speaker 2: The Commerce Commission knows that they're there. But, you know, very, very,
• 1:25
  Speaker 2: very little is done.
• 1:27
  Speaker 1: Unless something happens and then you've got to presumably try
• 1:32
  Speaker 1: and take them to court or get a lawyer involved
• 1:34
  Speaker 1: or something, is that how it normally would get resolved?
• 1:37
  Speaker 2: Well, actually, with unfair contract terms, you can't do that.
• 1:42
  Speaker 2: You can't go to the court. Only the Commerce Commission
• 1:45
  Speaker 2: can go. And we copied that law off Australia and
• 1:48
  Speaker 2: they allow you to go to the equivalent of the
• 1:51
  Speaker 2: Dispute Tribunal. So that's a big piece. Also, a couple
• 1:55
  Speaker 2: of questions. A couple of the things they're proposing actually
• 1:59
  Speaker 2: currently break the law. So, for example, what they want, say,
• 2:03
  Speaker 2: for cars is to require the car seller to show
• 2:07
  Speaker 2: you the total cost of the life of the agreement
• 2:10
  Speaker 2: if you get finance to buy it. But already there's
• 2:16
  Speaker 2: the Credit Contracts and Consumer Finance Act, which is meant
• 2:19
  Speaker 2: to do that. So whenever you're buying anything on credit,
• 2:23
  Speaker 2: you're meant to be told the entire total upfront costs,
• 2:27
  Speaker 2: including all the fees and interest that you'll be paying.
• 2:30
  Speaker 2: So I'm not quite sure why they're suggesting that. But
• 2:36
  Speaker 2: there are some good things. So for example, extended warranties.
• 2:41
  Speaker 2: What they want to do is make it so that
• 2:45
  Speaker 2: you can't buy it or be forced on you on
• 2:48
  Speaker 2: the day that you buy something. It'll have to be
• 2:50
  Speaker 2: the day after, which will be quite a good break
• 2:53
  Speaker 2: because the current law says that you can cancel an
• 2:58
  Speaker 2: extended warranty within five days. But I think very, very
• 3:01
  Speaker 2: few people do that. So that's good. Another really good
• 3:04
  Speaker 2: one is making the cancellation of subscriptions as easy as
• 3:07
  Speaker 2: signing up. That's really good.
• 3:09
  Speaker 1: It's a nightmare.
• 3:10
  Speaker 2: Because that's a huge, yeah, it's a huge issue. And
• 3:12
  Speaker 2: that's what they do in Europe. So I think some
• 3:14
  Speaker 2: of this has been copies from Europe. Yes, also to
• 3:17
  Speaker 2: banning unfair exit fees. But that would be good. I mean, technically,
• 3:23
  Speaker 2: some of them are already what I call illegal because
• 3:26
  Speaker 2: there'll be penalty fees, but no one really knows about that.
• 3:29
  Speaker 2: So that would make things a lot easier.
• 3:33
  Speaker 1: Alex, fascinating talking to you. The most shocking thing you've
• 3:37
  Speaker 1: told us this morning is that you can't go and
• 3:39
  Speaker 1: challenge through the courts a contract that you've signed, even
• 3:41
  Speaker 1: if the contract is breaking the law. Outrageous. Alex, nice
• 3:45
  Speaker 1: to have you on the program. Alex Sims, Auckland University Professor,
• 3:47
  Speaker 1: Department of Commercial.
• 3:48
  Speaker 2: Law, For more from Early Edition with Ryan Bridge, listen
• 3:52
  Speaker 2: live to News Talk ZB from 5 a.m. weekdays or
• 3:56
  Speaker 2: follow the podcast on iHeartRadio.