Not-for-profit consumer organisation Choice has called on the federal Government to act on findings from the Productivity Commission by linking penalties for breaching Australian consumer law with company profits.
“If implemented, these changes would act as a real deterrent to large companies, who currently see penalties for breaches of consumer law as little more than a speed bump to huge profits,” Choice CEO Alan Kirkland said.
The Productivity Commission report titled ‘Consumer law, enforcement and administration’ shows that companies caught duping consumers face minimal penalties. The report recommends that such companies should incur a maximum fine of $10 million, or three times the profit made as a result of breaking the law, or 10 per cent of their annual turnover.
Mr Kirkland points to several instances where the profits from selling products through deception have outstripped the penalty imposed by courts.
Choice claims Reckitt Benckiser recently gained about $45 million in revenue from misleading consumers with its Nurofen ‘targeted pain’ products – but was fined just $6 million.