Consumers’ Plight: ‘Buyer Beware’ Information Buried
Sourceable July 20 2016 ANNE PATEN 66 Shares 10 Comments
When Australians sign a building contract, they know they will be making the biggest investment of their lives, but the truth of the inherent dangers of building and the extremely high probability of serious harm is kept from them.
Put simply, the fundamental facts are buried, and are not ‘discoverable.’ Regardless of their efforts, this consumer class has been consigned to be unaware, starved of all basic ‘buyer beware’ knowledge. Shamefully, no possibility of protection is our consumers’ plight.
‘Buyer Beware’ charade
For consumers, being educated is the key tool in their ‘protection box.’ All have a ‘right’ to be able to obtain accurate information, investigate realistic choices and to make a judicious decision. But no matter their commitment, for building consumers realizing their ‘right’ is an impossibility.
As ‘caveat emptor’ consumers would envisage, past conduct could be an indicator of future behaviour; hence the importance of sourcing building practitioners’ past history. How frustrating, then, to find such endeavours are futile. For decades, government agencies have collected voluminous information, but almost none of this is available to the public. All consumer complaints information, ‘dispute’ data and detriment statistics are hidden, securely locked away in the Consumer Affairs Victoria’s treasure trove. As for the information held by the Building Commission over its 20 long years, in 2014 this was entirely erased by the ‘new’ VBA. The limited publicly accessible information is fragmented, difficult to find and hopelessly inadequate. The ‘buyer beware’ option is bogus, a contemptible charade.
Consumer protection con
Government spin has been remarkably successful, duping prospective consumers into thinking ‘consumer protection’ exists. But the reality revealed from numerous independent reports and well-documented consumer experiences is the juxtaposition of ‘systemic failure.’ For 23 years, the ‘consumer protection strategy’ has been a ruse, the malfunctioning system calculated perfectly to malfunction (Victorian Auditor-General’s Report, May 2015).
In stark contradiction to its stated purpose and imperceptible to consumers, the ‘protection strategy’ was shaped to ‘protect’ all in the building industry, whilst consumers were designated to be defenceless and without any safeguards inexorably exposed to exploitation. From 2005, we can chart the destiny of hundreds of thousands of owners every year; fated to incur massive financial loss, years of living in limbo, shattered families and if not dead, left lingering under unending traumatic stress.
To describe the cornerstone of ‘consumer policy’ as punishing would be an understatement. Rendered ignorant, consumers are incapable of making informed, wise decisions, their disadvantage further compounded under the Government’s dispute-driven modus operandi. Unknowingly, 40 per cent of owners are compelled into ‘disputes’, powerless to combat the pitfalls of an unfair, unjust legal system and unable to avoid the additional monetary loss. Helpless, their predetermined destiny is patently undetectable.
The truth deficit
Most government reports and records have been withheld from the public. The information obtainable is negligible, tightly controlled, defectively deficient and quintessentially a truth deficit.
Even if a motivated consumer were to locate the Practitioner Disciplinary Register (PDR) on the VBA website, it would be pointless. Few names of building practitioners appear on disciplinary records, since the bulk of real offenders either ‘never appear’ or magically ‘disappear’ – move over David Copperfield!
Consider that there are thousands of consumer complaints every year (the VBA admits to only 978 in 2014-2015), but few are acknowledged, fewer investigated and almost none proceed to an Inquiry. Commonly, owners’ complaints ‘disappear’ and the files are customarily lost or closed. Many owners never receive any response. Only the most persistent, after lodging multiple complaints and hundreds of pages of evidence, will be informed that their complaints are ‘in the bin.’
An examination of the PDR reveals few builders’ or surveyors’ names (no company names) because to get listed, there has to be an Inquiry. Of 21,799 building practitioners registered in 2014-2015, only 94 were summoned to a disciplinary Inquiry or 0.4 per cent. These generally result in a reprimand and sometimes a small fine – though now in the latest VBA Annual Report, the actual outcomes are no longer reported.
Last year, there were 35 registered builders prosecuted – a 0.1 per cent probability of prosecution. In relation to plumbers, of 26,361 registered last year, only 18 were called to an Inquiry and 19 prosecuted – a minute 0.07 per cent chance of a plumber going to Inquiry or prosecution (VBA Annual Report 2014-2015). There is almost no prospect of punishment or deterrence!
Many of those called to an Inquiry will appeal their penalty and thus they never make it onto the PDR list. Finally, even when it comes to those once appearing on the PDR, names can be arranged to be deleted.
In this context, consider that in 2011, 256,000 Victorian consumers suffered financial detriment totalling billions of dollars. One would expect to find thousands of registered builders disciplined in 2011, their names on the PDR and some serious penalties metered out, but no! A review of the 2011 PDR reveals a mere 83 builders and surveyors listed. Of building surveyors (the most criticized group), only 12 appear. As for penalties, reprimands predominate and notably few suspensions or cancellations (not permanent), and most continue operating anyway. These statistics provide pathetic proof of who has ‘protection’ – and it’s not consumers.
Should an owner attempt to find information on cases at the Victorian Civil and Administrative Tribunal (VCAT), it would be another wasted exercise. Thousands of cases go to the VCAT Building List annually, but only a minuscule number make their way to the ‘official’ VCAT list. First, only those cases which go to a full hearing end up on the list – around 30 a year.
Second, all other cases, many dragging on for up to nine years and costing owners a mega fortune, are not listed; generally ‘finalized’ in favour of the building offenders, then ‘disappeared.’ Hence, of many thousands of VCAT cases over the last 18 years, whether volume builders or sole traders, all remain unknown. Most tellingly, VCAT does not refer any offenders for disciplinary action, even the many repeat lawbreakers. Consequently, no matter their aberrant or serial misconduct, all reprobates are protected and their past history covered up.
Deprived of power to control their lives, consumers have been robbed of any opportunity to prevent harm. CAV’s role is purportedly to protect consumers, and as a member of Consumers International, it committed to enforcing the eight basic Consumer Rights – including the right to be informed, to consumer education, to choose, to satisfy basic needs, and so on. Deplorably, and as has been very well documented, CAV elected to work vigorously against building consumers’ interests and artfully voided all their ‘rights.’
Now try to think of being a clueless consumer in a clandestine bureaucratic world. Have a crack at comprehending this imposed gullibility as one part of the whole duplicitous official strategy. Then imagine this combined with the building/consumer protection agencies’ infamous track record. We have the risible regulatory framework, zero enforcement of compliance, the unfair contracts (contracts over $300,000 exempt under Australian Consumer Law), enforced disputes and the notorious junk DDI insurance.
Our consumers’ plight is no accident. It is a direct consequence of a spurious scheme, and minus any ‘buyer beware’, it clearly coiled into to a consumer catastrophe.
- John Bolton
Certainly, the lack of availability of former Building Commission reports on the VBA’s web site is extremely poor. Anyone trying to find any of those… reports gets no help whatsoever from the VBA web site (I myself have tried to find them – as is stated above, they are not there). Given how bad these reports were, one would have to be pretty naive to believe they weren’t buried on purpose.More broadly the level of accountability in the system is generally poor.
My question to you, Anne, is what to do about it. What form of governance structures would you put in place in order to rectify this? How specifically should things be reformed and changed?
- Peter Pike
We all agree with you Anne & the propensity for government change is nil. We have seen both parties over the last 2 decades talk it up and employ… public servant who’s main attribute is spin! It is a disgrace and an indictment on our society this can go on. The massive toll & cost on all of us is currently not being correctly portrayed. Add the insurers into the mix and we have a perfect storm!!!
- Graham Morrow
There are many issues with the homebuilding industry in Victoria and similar issues are shared with most other states.
People… who are about to enter into usually the biggest contract of their life frequently omit to seek early legal advice in regard to the rights and obligations of owners and builders under that contract and are instead seduced by sales talk and the ‘executive’ finishes of showhomes.
It will be interesting to see what impact the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 (Cth) will have on these matters; it should assist some mum & dad building contract participants, although they will still likely have no option other than to seek recovery in the court (or Tribunal, or arbitration) dispute resolution process.
Yes all so true and well stated Anne. The concept of the “public good” has beeen completely ignored to the detriment of citizens. For a fair and just… society, a public register of all building works lnking all contractors engaged in works with outcomes should be available to all. This should be just a basic requirement for “quality control”. Now thats anoher concept seemingly foreign to the industr at the moment. Presently If a builder uses dodgy electricians or plumbers to cut costs they are never linked to the builder concerned and consumers have to take on every apple in their barrel. I did a lot of research on my builder before I signed a contract and could not find anything agaist them in the prior 25 years. It wasnt until after the true situation unfolded that those connected to the industry began revealing how well known they were for bad practices. You are completely right that the regulators know who the repeat offenders are and play out charades with us all. We have a right to know for our health and wellbeing alone. This abhorrent system has existed for two long and it may require those with a conscience from all political parties to standup and be counted for the common good and the future of the housing stock in the state
The whole system is designed to exhaust consumers and the few who have the fortitude or financial ability to keep pushing for justice and common decency… are further penalised financially and emotionally by insane decisions made by so called regulators and court systems.
Immoral insurers repeatedly offer insurance cover to repeat offenders knowing the risk of successful claims are minimal, thanks to a system designed to intimidate and destroy desperate families who have to ‘give up’.
Why is this blatant destruction of consumer protection allowed to proliferate? Because consumers/families are nothing more than expendable financial fodder for the building sector infested with disreputable individuals and the tax grab this generates for government.
Short sighted disinterest/ negligence shown by successive governments will eventually come to bite when these families lose their financial security, mental health and are forced depend on the government coffers for support.
Those we elect to represent us, betray us, couldn’t care less, after all their transient political careers seem to be more focused on their fat political pensions, perks and cushy retirement!
- Mark Whitby
You’ve stated the problem in a nutshell Anne… well done.
Perhaps there is a reason why the VBA says only 978 complaints were received in 2015… and the 2011 VAGO report stated there were 256 000 complaints… and in 2015 this could reasonably be assumed not to have dwindled with more and more houses being built each year. So the other 255 022 non VBA complaints (99 62%) must not have filtered through to VBA or were handled elsewhere… BACV and Consumer Affair it seems.
Now these organizations have a semi-hidden agenda… “to expedite as economically as possible all building disputes and potential building disputes”. Now expedite means ‘make happen sooner’… than… VCAT hearing perhaps? Therefore most are scared off on the phone (81% in 2002 and today more like 90% I believe). That leaves those home owner individuals who will not be put off lightly, because they know that they have had a grossly inferior (to what was contracted) product delivered to them by their builders… and demand that their alleged defects are rectified.
Then comes the crunch.
Virtually nobody has cared enough to even define defect thoroughly… and so each side fails to convince whoever is in charge of the meetings / mediations / conciliations / Compulsory Conferences and so no awards are made because the Building Act legislation is so strict as to costs being awarded to the winner, demanding that the amount being awarded needs to be substantial.
And yes, the public are not informed of this at any stage before, during or after their homes have been botched by builders who do not supervise adequately. That is why organizations are able to loosely use the word complaint to their (and their government’s) advantage. And so failures are the go
Currently we are living the nightmare of being stuck in nowhere land and the injustice of having done nothing wrong except to believe that our research… bringing up nothing on our builder was a good thing. Wrong!! This builder has been allowed to continue to destroy people’s lives because the current system allows him to continue when he should be de-registered! He is not only a dodgy builder but a criminal as well, getting away with falsifying documentation and lying but yet it is the consumer suffering for it! Where is our ‘do not use’ list that should be made available to all?? We should be putting them up for all to see and find then easily and then perhaps not so many unsuspecting families will have their lives ruined. Justice? None that we can find
And it gets even more stacked against the consumer…..
When you give a statement to an investigator, he’ll tell you it’s in confidence. It’s not…. He’s working for the VBA who passes it over, personal information and all, to the BPB. The BPB give it out to the practitioner on every occassion in the brief of evidence. This is the ruse they use to try to get around the legislation.
So now the practitioner knows where you live, your phone numbers, email addresses, opinions, etc. even though you may never even have had any interaction with them.
Why? The only reason I can conclude is so the practitioner can find you and ‘sort you out’!
- Jenna Corbett
Fantastic Anne! What hope do building consumers have when all the so-called regulatory bodies blatantly collude with industry and not only hide pertinent… information regarding bad practitioners, but after defective and hence, serious economic and, hence, life- allround, damage to the consumer, they then not only deny every form of justice and access to necessary compensation, but actively work against it, including all the so-called Government authorities such as Consumer Affairs Victoria and VCAT with full Government knowledge and support! And the trusting consumer entering into building, not only their Australian dream, but the very basic, of their family shelter, homebase, and also life asset, has no idea of how there is actually: No protection, or fair or timely redress if the tradesmen or pretend or con tradesmen do wrong; how even the industry Building Contracts actually generally totally favor the builders interests; the Building Warranty Insurance is an unclaimable junk product; and with Government orchestration from the top down, it’s well -documented that All the regulatory and compensatory authorities uphold the Builders or even illegal or incompetent pretend con-artists interests! And Mark Whitby makes an excellent point below how with defects not defined, there’s a great place for the authorities to start to deny, minimize and hide from justice! The only solution is to Owner Build with only the most careful selection of tradesmen. VCAn’T, the VBA, BCAV, and Consumer Affairs Victoria must all be completely routed and reinstated with true consumer led representation.
- Anne Paten
Yes John, all documents were buried – the 20 years detailing how badly the BC behaved, and by the 2012 Ombudsman’s Report we learned that this was Govt… approved! Thus, false survey stats on ‘consumer satisfaction’, the policy devised to deliver the exponential increase of ‘disputes’ so damaging to consumers , the stories of the many serial offenders who repeatedly caused horrific harm to many thousands of consumers over decades, etc. But now it is gone – and so it never happened! As for the ‘new’ VBA – new name, but same old ‘culture’!
Re addressing the big questions, the structure is irrelevant. The problems are (i) GOVERNMENT POLICY allowing industry to direct policy, with those to be regulated making up all the ‘regulatory’ Boards and Committees, certifying the ‘regulation’ of themselves! (ii) ZERO ENFORCEMENT by the ‘regulators’ – public officials supporting industry and thus the inevitable enormous pain and suffering to consumers. These two mean that the industry ‘governs’ and there is zero ‘regulation’. (iii) The OFFICIAL PHILOSOPY is based around a cosy, ‘buddy’ culture, whereby the policy and ‘regulatory’ officials are not simply in bed together, they are one and the same. Just imagine the Building Appeals Board meets about a rogue building surveyor. The panel comprises two building surveyors and one lawyer – guess the outcome? Despite the facts and evidence, the surveyor working for a very large volume builder is ‘amazingly’ found to have done no wrong! The ‘official culture’ is to protect all in the business of building – no matter how negligent, how criminal and regardless of the building wreckage/human carnage left behind!
No pollies plan any ‘rectification’ – shamefully, ordinary people do not matter.