Monthly Archives: July 2013

Currents, Continents and Consumer Law

Kathleen-EngelWe are grateful to Professor Kathleen C. Engel of Suffolk University Law School for providing this guest post on the International Association of Consumer Law biannual conference:

Every two years, consumer law academics from around the world gather to present their research and discuss their countries’ credit markets and consumer protection laws. This year, the International Association of Consumer Law held its biannual conference at the University of Sydney. Given Australia’s extraordinary success protecting consumers while providing broad access to capital, the setting was fitting.

The conference delegates hailed from Taiwan, Brazil, South Africa, China, Finland, Indonesia, Japan, Malaysia, the UK, and many other countries. There were well over sixty papers presented as as enlightening talks by Australian regulators, ombudspeople, and members of the judiciary.

For me, the highlight of IACL conferences is the opportunity to learn about the experiences of other countries—the challenges they face in making affordable credit available, the structure of their credit markets, their consumer regulatory systems, and the protections they provide consumers. At the end of the day, the balance between protecting consumers and ensuring access to credit seems to be the core issue in all countries.

The individual papers were outstanding and I wish I could write a synopsis of each of them. Instead, I will highlight a few of themes. One distressing theme was that while many countries have strengthened their consumer laws in recent years, widespread exploitation of consumers continues. During one session, the audience was exuding envy at a description of Brazil’s consumer protections, which are Constitutional, only to find that abuses continue there. Why? Because the profits to be made through unlawful loans far exceed any consequences for making such loans. Brazil is not alone.

Switching gears, Sharia complaint financing was on the conference agenda. In western countries,there are structural barriers to Islamic financing, such as how to develop credit products that do not have any interest features and developing a secondary market for such products. There are also concerns about how to reconcile Islamic financing with extant consumer protection laws. For example, with some types of Sharia compliant financing, homes are under “underwater” from the outset, which could run afoul of loan-to-value limits. Even in countries where there are significant Muslim populations, there are issues of bank compliance with both religious and secular law.

Big data and the internet came up at a number of sessions. For years, people have talked about how lenders can dupe consumers because of inequalities in their understanding of credit terms and unequal bargaining power. There is another growing power imbalance: the private sector has more information on individual consumers’ spending habits and credit histories than the consumers themselves have. Industry can use this information to target consumers with specific products, but consumers don’t have information on their spending patterns that would help them make informed choices.

The intersection of the internet and consumer protection gave rise to a host of papers, including the question: what is applicable law in cross-border transactions? What consumer law applies if I use the internet to rent an apartment in Shanghai that is owned by someone in Pretoria? No easy answers to this question.

My final thought is actually an expression of thanks to Gail Pearson, Professor at the University of Sydney, who hosted and planned a flawless conference.

» Originally posted on the Consumer Law & Policy Blog

Report on the 14th IACL Conference

Sydney turned from weeks of rain to beautiful winter sun to welcome the 14th biennial conference of the International Association of Consumer Law at the University of Sydney.

The theme of the conference was diversity and it lived up to this. There were 66 papers from 16 countries. This does not include the plenary sessions. The conference was opened by the Deputy Vice Chancellor of the University of Sydney who explained the spiritual significance of the land and welcomed visitors to a place of gathering for ceremonies and learning for thousands of years.

The President of the Association, Vice chancellor Sothi Rachagan spoke on financial services and the disparities between the banked and unbanked world.

The Opening address by our guest, The Hon Justice S Rares was a lively account of some early fetters on freedom of contract and a critique of the multitude of overlapping statutory protections in current consumer law in Australia.

This was followed by another plenary panel. This was a presentation of research undertaken by the Consumer Action Law Centre to assess the performance of federal and state regulators in taking enforcement measures and a subsequent discussion involving four senior Australian regulators. The next day in another plenary session three Ombudsmen addressed the conference outlining their role and the volume and type of complaints they deal with. In the afternoon at the final plenary session three regulators outlined how the new Australian consumer law is administered and the nature of cooperation between the states which ensures for instance that travelling scammers are tracked from state to state and local communities warned through the media.

The Brazilian Consul General briefly addressed the conference on the importance of the Brazilian proposal for a convention on the international protection of tourists.

There was much sharing of information, proposals for reform, and cross fertilisation of ideas between delegates who came from every continent and included academics, representatives of consumer organisations, representatives of regulatory agencies, other ombudsmen, and judges.

The speaker at the conference dinner is one of the stars of the Australian Broadcasting Commission television program The Checkout. This is a comedy program with a serious consumer affairs message. Several delegates from different countries now intend to use utube segments from The Checkout in their teaching.

The conference supported a statement sent to it from the International Law Association Committee on the International Protection of Tourists as Consumers.

“The International Association of Consumer Law [or the IACL-members], on the occasion of the 14th Biannual Conference at the University of Sydney, expresses strong support for the Brazilian Government’s Proposal to add to the working agenda of the Hague Conference on Private International Law the subject of the protection of international tourists as consumers. The Brazilian Proposal to create a global cooperation network on the subject has every chance of success and the IACL wants to compliment this effort to facilitate the protection of international tourists as consumers.”

Those members of the IACL Board who were present at the conference met. This followed email exchange with other Board members. There was a general meeting of the IACL.

It was agreed that the governance structure of the Association should be changed to include an Advisory Panel and a Board. The Advisory Panel should consist of the founding members of the conference and Past Presidents. It is desirable that at least one past President should remain on the Board.

It is envisaged the Advisory Panel will be Antonio Benjamin, Thierry Bourgoine, Geraint Howells, Sothi Rachagan, Iain Ramsay, Thomas Wilhelmsson

The Board thanks the following for their valued contributions to the Association:

Gabriel Stiglitz – who has stepped down for Sebastián Barocelli with the aim of reviving Argentinian participation. Peter Rott who said he is happy to stand down to make way for Marco Loos. Allen Zysblatt is retired and happy to stand down. There does not appear to be anyone from the immediate region to take his place at present.