Does Australia need a ‘don’t be a jerk law’ to stop unfair business conduct? Consumer groups say yes

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Ruby Callaghan has tried for six months to stop one of the world’s retail giants from charging her unwanted fees.

Ms Callaghan’s ordeal with her Amazon Prime Video subscription began in March, when she tried to cancel her account.

When she first signed up in 2021, the cost was about $7 per month.

However, a year later the cost rose to about $22.

She later visited the company’s website, and thought she had successfully cancelled her subscription, but the charges kept coming.

In desperation, Ms Callaghan cancelled her bank card to stop the payments.

“Just start to finish, they’re horrible,” she said.

The 28-year-old is disappointed a tech company — which had sales worth half a trillion US dollars last year — would treat her so poorly.

“[I’ve used] quite a few swear words,” she laughed.

“I have actually ranted to my parents just how frustrated I am to not get anywhere.”

In July, she emailed Amazon to complain and demand reimbursement, saying the website was “impossible to use”.

“I ended my subscription months ago. I also went into my Amazon account and it states that I have no active subscription,” she wrote.

Ms Callaghan said she received an automatic reply, but no-one answered her email.

‘Yeah, that’s pretty crook’

Consumer groups call what happened to Ms Callaghan a subscription trap.

“[That’s] where a business makes it very easy for you to start paying them money (and) it’s very difficult for you to stop,” Erin Turner, the CEO of the Consumer Policy Research Centre (CPRC) told the ABC.

“You typically can sign up in one click, and until recently, Amazon Australia had a multi-step, hard-to-find process to stop paying them money.

“Amazon has been treating its customers as cash cows.”

CPRC research shows more than three-quarters of Australians have had trouble cancelling subscriptions.

The Albanese government is concerned about what it calls “unfair trading practices” including subscription traps and is looking at introducing legislation to counter it.

Assistant Treasurer Stephen Jones said while the practices were harmful to consumers and small businesses, they were currently legal.

“I think the name ‘unfair trading’ sort of captures a lot of behaviour,” Mr Jones said.

“It might not yet be unlawful, but I think when you look at the sort of behaviours, Australians would go, ‘Yeah, that’s pretty crook — why is that allowed to happen?'”

The government will soon release a discussion paper on the type of unfair conduct a new law could cover and has provided an advance copy to the ABC.

Many kinds of shocking business behaviour are already prohibited under Australia’s consumer laws, such as unconscionable conduct, misleading or deceptive conduct, and unfair contract terms.

For years, the consumer watchdog and consumer groups have argued those laws have specific definitions that limit their practical application.

One solution could be to look overseas where there are laws, nicknamed “don’t be a jerk laws”, which target unfair behaviour.

“We definitely need [that here],” Ms Turner said.

Mr Jones said he believed unacceptable conduct was going unpunished in Australia.

“What we’ve seen emerging over the last few years is some harmful practices which fall between the gaps and the cracks in the Australian consumer law,” he said.

Mr Jones said Australia was playing catch-up with other major economies.

“This exists in all the biggest markets around the world,” he said.

The push is likely to face opposition from big business, which has previously warned it could have unintended consequences, like making it harder for new players to enter markets, which could reduce competition.

The government said it would consider the feedback before drafting legislation next year.

Amazon offers refund after contact from the ABC

Amazon, which earned around $54 billion last year from worldwide subscriptions, is already in hot water overseas because of its alleged conduct.

The US Federal Trade Commission is suing the company, alleging it tricked millions of consumers into signing up for Prime.

It has claimed Amazon trapped customers using deceptive design tricks dubbed “dark patterns” to sign up for auto-renewing subscriptions, while making the processing of unsubscribing more difficult.

Amazon’s leadership “slowed or rejected changes that would’ve made it easier for users to cancel Prime”, the FTC’s lawsuit claims.

Amazon has labelled the allegations false, and said both signing up and cancelling was a clear and simple process for subscribers.

However, Erin Turner said she investigated Amazon’s subscription practices in Australia, and discovered practices found to be unfair in the EU were underway here.

“While Amazon has stopped its poor subscription practices recently, it still hasn’t answered for the money it’s cost Australians up until now,” she said.

Amazon declined an interview request, but after being contacted by the ABC offered Ruby Callaghan a refund of $280.

The company confirmed Ms Callaghan did successfully cancel her Prime membership in March, but did not answer questions about why she continued to be charged after unsubscribing or why her monthly fee had increased to $22.

In a statement, an Amazon spokesperson said the company regretted Ms Callaghan did not have a “positive shopping experience”.

“We updated the Prime cancellation process recently in Australia. The updates are consistent with those made in Europe during 2022, and the US earlier this year,” the spokesperson said.

“Both the prior and new cancellation process are clear, simple, and comply with applicable law.”

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By national consumer affairs reporter Michael Atkin and the Specialist Reporting Team’s Jenya Goloubeva (Original ABC Article)