See www.scamwatch.gov.au

Decide what you need and what you can afford. Don’t over-commit yourself financially. Compare prices and finance terms offered. Don’t sign anything you haven’t read or understood. Read guarantees carefully. Be wary of advertising and sales gimmicks. If in doubt seek Legal advice. Don’t hesitate to say no. Take inflation into account. If dissatisfied with goods or repair work complain.

The most basic advice that anyone can give a consumer is to be careful. In the consumer field the law generally says “let the buyer beware”.The law says that you—the consumer must protect yourself in most situations. The onus is on you to guard yourself against faulty goods and services, smooth-talking salesmen, high-powered advertisements, harmful clauses in contracts, and plain racketeers. The law will protect you in many areas but some business people have found ways to get around those legal protections when they are dealing with careless consumers.

Beware of:

1. Undivided land shares.
2. “Unclaimed” or “repossessed goods” because you will probably be shown something which is damaged and then switched to an expensive item.
3. A freezer food plan that promises a free freezer or wholesale food, or that it will pay itself out of savings.
4. Cheap mail order goods where you pay before seeing what you buy.
5. Paying for neighbours’ packages.
6. “Selling out” sales at stores.
7. False economy devices such as fuel savings devices.
8. Schemes to earn money by working at home.
9. Mail order “quick” cures for health problems.
10. Signing documents without reading them.
11. Being bulldozed into buying something you don’t need.
12. Paying high interest rates since buying on credit can double the cost.
13. Bargains that “can’t wait”.
14. “Vanity schemes” that grow your hair or reduce your weight, etc.

Written Contracts. The biggest trap for consumers is in signing written contracts. These often make it impossible for you to do anything about the goods or services you have bought if they are faulty. They also often contain clauses hidden in small print or disguised in complex language which impose onerous obligations on you. Furthermore, they often contradict what the salesman has told you. Remember that in any transaction the law says that written contracts almost always override verbal agreements or understandings. If the salesman makes you promises which are contradicted by the form you sign, his promises have no effect unless fraud is involved. Read the document before you sign it. If need be take the form home to read. Don’t sign it before you understand it.

Never sign a blank or incomplete form. If you do you are virtually writing an open cheque for business people. Insist on the deletion of any condition that you do not like and insist on the addition of any promises that the salesman has made to you. Obtain an accurate copy of every form that you sign.Thoroughly inspect or observe the goods or services you are buying. Similar principles should guide every aspect of your consumer purchases.

Advertising. It is important to prevent yourself from becoming drawn into buying goods or services that you do not really need and cannot really afford. Think about this before you buy new products such as videos and CD players. In this age of material affluence business people are devoting a large part of their effort and resources to drawing you into buying more and more commodities. They want you to buy and they want you to buy often.They use advertising, offers of credit and psychological appeals to your fears and desires to achieve their ends. You must be aware of these pressures and you must be alert and informed enough to resist them so that you only buy what you really want and at a price you know you can afford.

Warranties. The following points should be considered: Scrutinize all advertisements and warranty cards. Make sure you know what is supposed to be guaranteed and that this is spelt out in clearly stated terms. Be careful that you are not swayed by the use of the word warranty as it may not offer the protection you assumed. Ascertain the actual parts or items covered by the warranty. Make sure you know the exact duration of the warranty. Make certain you understand your obligations and those of the manufacturer, seller or service firm. If you are required to return a form so that the warranty is operative, do so.Always determine who is the guarantor – the seller or the manufacturer.

Read fine print carefully and don’t take the seller’s word for alleged benefits present. Once a warranty has expired consumers sometimes choose other than the dealer or the manufacturer to service the appliance needing repairs. Often selection of the service firm is obtained by random selection from the telephone directory. Selecting a service firm at random from the “Yellow Pages” telephone directory can be an expensive and troublesome experience.

To prevent overcharging, first request an itemized quotation listing the authorized work, the cost of parts, and labour charges. It is generally accepted that most repairs to domestic appliances can be effected in the home. It is only when a major breakdown occurs that workshop attention is warranted.

Door-to-Door Sales – General Advice. Don’t buy anything if you are unsure of its value. Don’t sign a contract to get rid of a salesman. Call the police if a salesman is a nuisance. Be sceptical of offers of free goods. Don’t fall for sales pitches based on supposed educational needs of your children. Check with their teacher.

If it is a set of encyclopedias which is being sold, remember that your children will only use a fraction of the information it contains. Valuable sets of encyclopedias are available in the reference sections of some libraries. If the product being offered is designed to cover the fibro or weather board exterior of your home, don’t sign until you have obtained several quotes. Most door-to-door sales can be cancelled by you within a brief period usually 10 days except cash sales.

Get rich scams costing consumers millions.

According to the Herald Sun 1/12/2000 consumers are losing millions of dollars to scam lotteries, competitions and get-rich-quick schemes. Rip-off merchants luring victims with cash-prize promises and gifts are running rampant.Victims are baited with supposed car and lottery winnings, cut-price items such as rubies, diamonds and electrical appliances, or promises of huge wealth. Investigators have uncovered a myriad of suspect schemes including requests to send money to mystery mail boxes, unsolicited mail announcing competition wins, and calls for deposits to ensure future wealth. Operators track down victims after buying mailing and fax lists. Officials estimate tens of thousands of Victorians have received scam offers. State consumer affairs authorities have sent warning letters about various scams. Money or credit card details should never be passed on without verifying companies through a telephone number or other firm contact details. People can report suspected scams to Consumer and Business Affairs. A link to a national registry of alleged scams can be obtained through www.scamwatch.gov.au.

Warning Signs: An offer that sounds too good to be true; post office boxes with no street address, or ones that refer to a suite; no mention of a telephone number; unsolicited mail claiming you have won money; a claim you can make large sums of money in a short time; invitations to join a scheme by paying a sum of money now with the promise of wealth in the future; chain letters asking you to send money or gifts to people higher up the chain.

Do’s and Don’t’s when buying on credit.

(a) Make sure you know the cash price of the goods before entering into a credit agreement.
(b) Carefully examine the goods to make sure they are in good order and condition and will meet the purpose for which you are acquiring them.
(c) Don’t be rushed into signing a contract; study it to make sure of the type of credit it covers, check the total amount involved, not just the amount of each instalment, and think carefully whether you can afford the payments.
(d) Allow for regular commitments, such as rent and other living essentials, leave a “reserve” for the unexpected and don’t bank on uncertain sources of income such as overtime, part-time job or a “working wife”.
(e) Consider registration, third party, comprehensive insurance premiums, maintenance, reasonable repair and running costs before buying a car.
(f) Pay the highest possible deposit to give you a worthwhile equity and lower repayments and don’t buy if you have to borrow the down payment.
(g) Avoid overlong repayment periods, which only increase the cost to you, and, remember, it is better to get one item at a time than to stretch your budget by trying to obtain several at once.
(h) Don’t hesitate to contact your finance company if, through unforeseen circumstances, you have trouble in meeting repayments. All companies wish to help solve the genuine problems of clients.
(i) Don’t sign a blank hire purchase form or any other type of credit agreement.
(j) Don’t take the salesman’s word as to the costs involved – check each item in the agreement.
(k) Make sure you know the rate of interest involved.

Legislative Protection for Used Car Buyers. Agreements for the sale of a car must be in written and you must be given a copy. It is an offence to tamper with a speedo, to substitute a speedo and to state a false mileage if done deceitfully.The dealer must repair at his expense any defect appearing in the car within a certain number of months or kilometres travelled, depending on the price paid for the car. The extent of protection varies from State to State – check with Consumer Affairs in your State. However, defects which were stated in writing at the time of the sale along with a fair estimate of repairs cost (and which are acknowledged by your signature), arise from an accident you are involved in, arise from your misuse or negligence, or concern only tyres, battery or accessories, are exceptions. Second-hand cars cannot be displayed without a notice containing particulars, including name of last owner, mileage, when acquired, cash price, and year of first registration. If these requirements are not met you can apply to have the sale cancelled or to be compensated for your loss. Check with the office of fair trading about the above legislative protection. You should pay the RACV, RAASA, NRMA, RACQ, RACWA or similar organisation to test the car. The money spent may well be worthwhile.

Make the agreement subject to the car passing the test and get that condition in writing. You should test drive the car with the salesman to confirm your satisfaction with it.

COMPLAINTS

Complaints to the Seller. If you have bought something the first thing to do if you have a consumer complaint is always to complain to the seller (or hirer or serviceman as the case may be). He might agree with your complaint and do something about it. Some sellers take faulty goods back as a matter of course because they can pass them on to the manufacturer.

You need to complain to the trader to find out exactly what his attitude is to your complaint. If he is not going to give you satisfaction it is valuable to know what his reasons are before taking further action.

Offices of Fair Trading are government offices for handling consumer complaints. They will give you some general advice over the telephone, but will generally not take any action on a complaint unless it is made in writing or in person. If you make a complaint the Offices will give you advice or will write on your behalf to the trader concerned.The Offices refer many of their complaints to other government bodies to investigate. If your complaint is considered to fall within the administration of another department or authority (e.g. Health Department, Police) the complaint is referred to it. If the complaint is against another department or authority it is referred to the Ombudsman.

Claims Tribunal. A Claims Tribunal (VCAT in Vic) is constituted by a Referee who is authorized to hear and decide a claim by a consumer who feels that he has been disadvantaged in a transaction with a trader. The hearing takes place in an informal atmosphere in which both sides are heard. No lawyers are allowed unless both sides agree and the Referee also approves.The only cost to the consumer is a nominal fee that must be paid when a claim is lodged.

Orders made by the Referee are legally binding and cannot be appealed against. The Tribunal can hear cases involving purchases or hire of goods or involving the performance of work by a trader. The Referee cannot make an order against a trader for payment of more than the limit of the jurisdiction which varies from State to State.