1. Cutting Red Tape by Making Consumer Regulation More Effective Carolyn Bond Co-CEO

2. Red Tape  “Red Tape” – unnecessary paperwork/regulation  Reduce “red tape” by making regulation more effective

3. What is Effective Regulation? For the purposes of this presentation, I have assumed that effective regulation:  Prevents, or reduces, practices that are causing harm to consumers; and  Enables the individual consumer to seek redress

4. Choosing the Right Tools  Legislation  Codes – Voluntary and various forms of enforceable codes  Licensing  Criminal Penalties  Civil Penalties  Innovative approaches such as Unfair Contract Terms  Dispute options – courts, tribunals, industry ADR

5. Choice of tools depends on range of factors  Type of industry (size, culture etc)  Regulator (powers, resources, priorities)  Availability of consumer advice/legal services  Cause of the problem (industry structure, historical unfair practices, lack of clarity of laws )  Consumer factors (are these consumers particularly disadvantaged? – ie fringe borrowers)

6. Getting the structure right Identify the weak links in the regulatory structure:  Penalties (or risk of being caught) not great enough to discourage conduct;  Regulator not taking action;  Complaints/disputes process not accessible;  Complaints/disputes are not being used to identify and address systemic problems;  Regulation is not enforceable;  Industry is actively avoiding the regulation (ie finding loop-holes).

7. Discussion  Identify one example of consumer regulation that you believe is particularly effective or ineffective.  Identify the factors that impact on the effectiveness of this regulation.