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New Complaints Register and Impact on Building Industry

In late August 2016, the New South Wales Fair Trading published its first Complaint Register based on data from the month of July 2016.

The Register

The Complaints Register provides information about businesses that are subject to 10 or more complaints to the NSW Fair Trading in a calendar month and it will continue to be published monthly in the second half of each month for the previous calendar months data.

The aim of the Complaints Register is to make information about complaints available to the public and to hopefully provide business with an incentive to provide better customer service.

NSW Fair Trading have published a Complaints Registry Guide Book which provides details on the complaints process and why complaints will be registered.

NSW Fair Trading use the AS/NSW 1002-2014 standards for the definition of a complaint which is defined as “an expression of a satisfaction rate, to do with, or about an organisation, related to its products, services, staff or the handling of a complaint, where a response or resolution is explicitly or implicitly expected or legally required”.

The complaints will include complaints about:

  1. a)defective goods and/or failure to repair under warranty;
  2. b)fees and charges;
  3. c)misleading or deceptive conduct; and
  4. d)alleged breaches of laws.

The Process

Fair Trading already have a complaints process in place whereby complaints that are lodged with NSW Fair Trading are subject of attempts to negotiate an outcome. If a complaint can be verified as being the result of a genuine transaction between real persons, then the complaint will be registered.

Based on Fair Trading’s data there are around 20 to 25 businesses each month that have received more than 10 complaints.

Over time a total of 24 months’ worth of data will be maintained and published on the Fair Trading website. Businesses will be contacted as complaints are received so that they will be aware if they are nearing the 10 per month threshold.

If a business has been subject to 10 or more complaints per month the following information will be registered:

  1. a)the name of the business;
  2. b)the number of complaints Fair Trading have received in the last month; and
  3. c)the product complained about;
  4. d)The complaints register will not include information relating to the outcome of the complaints.

 Industry Concerns

The Complaints Register has been introduced despite the concerns of building and construction industry participants.

In their submission on the introduction of the Complaints Register, the HIA raised serious concerns that the register will enable the publication of un-vetted, un-substantiated complaints data against businesses with no right of reply allowed to the trader. In the opinion of the HIA, there is little regard to negotiations, actual justice or procedural fairness.

HIA state further that a public register or “shame file” for the residential building issues is unnecessary and unfair considering that the license register already contained provisions to publicise any penalties or proceedings brought against those in the building industry.

The HIA is concerned about the impact of negative consumer reviews noting that “negative customer reviews posted on a review platform which do not reflect the reviewers genuinely held opinion and are motivated by personal dislike of a business or its staff can cause substantial harm”.

There is a concern with the arbitrary nature of the Complaints Register and the fact that allegations to breaches can be made without a proper investigation of the allegations and their validity. There also appears to be little or no recourse to have complaints removed from the register when they are resolved.

Champion Homes note in their submission on the Complaints Register that the register may imply that large traders have a poor record when the number of complaints in relation to the business undertaken does not necessarily suggest a poor attitude to service and delivery of quality of workmanship.

They state, for instance, that a project home builder who builds in excess of 200 homes a year may receive a number of complaints. This amount may appear high but when viewed in the context of the extensive building works undertaken, the technical and contractual issues that may be comprised of disputes and most importantly the actual outcome of such complaints, an increase in the number of complaints does not in itself suggest a poor attitude to service of real quality of workmanship.

The builder conceivably could end up on a public register for merely a statistical reference for the number of complaints if nothing else, with no regard to the actual outcome of each individual complaint.

The impact on the building industry

The Complaints Register is likely to impact business entities in the construction business, especially those such as project builders who deal with a large number of customers in an industry where consumers are heavily and emotionally involved in the transactions.

Industry concerns may be justified as the first Complaints Register names two project home builders included among the 20 businesses on the register.

The Complaints Registry is likely to entirely miss out on picking out those individual contractors that tend to leave a trail of unmitigated problems in their wake when they are unqualified, unlicensed, or unequipped to undertake building work, however they do not transact with sufficient number of consumers to register on the Complaints Register.

Notwithstanding the industry concerns, the Complaints Register looks like it is here to stay and larger businesses will have to take this into account when dealing with customer complaints.

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