Primary Examination for the Bachelor of Laws Semester 1, 2009 CONSUMER PROTECTION AND UNFAIR TRADING Total Duration:
Instructions for Candidates
Students should answer either ONE of the two questions. Both
Candidates may take into the examination room any book or materials
other than those borrowed from a University Library.
DO NOT COMMENCE WRITING UNTIL INSTRUCTED TO DO SO QUESTION 1 You are employed by the Australian Competition and Consumer Commission and have
been asked to report on a number of complaints received in connection with the
advertisements and practices of a firm whose registered business name is Sexual
SIN has advertised heavily on late-night television, particularly Channel UPS 5. Viewers
have been invited to take the 14 day sexual chal enge. They are told that if they cannot
achieve satisfactory sexual relations with their partner on at least 5 occasions in the next
14 days, they need help from SIN. The advertisements then show white-coated men
and women conducting a physical examination of apparent patients lying on a couch.
The accompanying words state: “Our staff of professionals is waiting to guide you to
In fact, persons responding to the advertisements are greeted by salespersons who
mark off questions as to the client’s experiences against a check list. If the 5 times in 14
days threshold has not been met, the salesperson reports to a supervising pharmacist.
The salesperson then reports that the client is urged to undertake a programme of
medication. The programme involves a sequence of tablets substantial y based on
Viagra. The charge for the tablets and a subsequent review by a pharmacist employed
by SIN is $375. Ordinary Viagra tablets are available from any pharmacist on the
pharmaceutical benefits scheme for $12 for benefit card holders and $32 for others.
You discover that in a normal sexual partnership, relations occur at an average of 4 to 6
times per fortnight. However physical problems account for only 10% of cases of below
average sexual satisfaction. SIN’s programme of medication does assist in such cases
but no more so than a course of Viagra tablets.
You have approached SIN, but the firm stands by its programme. The firm points out
that the supportive atmosphere of its outlets contributes to client satisfaction as much as
the medication. The broadcaster for most of the advertisements (Channel UPS 5)
declines to take any action in light of assurances from the advertiser. The number of
complaints received by the ACCC is in the 1,000s. Many of the complaints refer to a
sense of disappointment as well as financial loss.
You are asked to prepare a memorandum of advice as to any civil or criminal remedies
open to the ACCC against SIN and Channel UPS 5 for breach of Part V of the Trade
PLEASE SEE NEXT PAGE QUESTION 2 Jenny is a keen supporter of the Amazons Women’s Softbal team. Jenny lives in a
remote rural community in north-east South Australia where she is employed by a
private welfare agency at a minimum wage. She is able to attend very few games in
which her team is participating. Consequently she was attracted by newspaper
advertisements for a mobile phone service provide by the Multi Sports Network (MSN).
The advertisements were aimed at a rural audience and claimed that wherever you were
in Australia, you could watch your favourite team in your favourite sport for only $10 per
Jenny noted the smal print statement “Terms and Conditions Apply”. She is careful in
her financial dealings and discovered that there is a joining fee of $19.99 and a monthly
subscription fee of $12. However she calculated that the Amazons game each week
lasted for 90 minutes and would be covered by at most a 2 hour weekly viewing period.
Consequently there would be a viewing cost of $80 per month. Jenny was able to afford
this amount plus the initial $20 and $32 subscription per month.
On her next visit to Adelaide Jenny calls at the city store belonging to MSN. She is
greeted by Bruce who claims to be the Regional Sales Manager for MSN. Jenny points
out that her finances are limited but she has been a keen supporter of the Amazons from
her early childhood. She states that she can just afford the $80 viewing fee each month
on top of the initial $19.99 and the ongoing $32 each month. Bruce replies that he is
keen to help someone involved in such socially important work; he undertakes to waive
the $19.99 joining fee so that Jenny’s monthly budget is $112. Bruce adds that ful
documentation wil follow in the post but that if Jenny ever strikes any problem she could
A couple of days later, Jenny fol ows the instructions to access the Amazons game for
the week. She is alarmed to discover that the only access is for a block of 8 hours
viewing which covers 2 hours for each of 4 teams and their opponents. She opts against
any access. The fol owing day the terms document arrives. It confirms that the
minimum viewing period each week is 8 hours. Furthermore a minimum of 3 months
notice is required to terminate the service and that for this period the client has agreed to
pay for a minimum of 8 hours viewing. Jenny contacts Bruce who replies that he was
merely outlining some of the terms and had referred to the full documentation. The $112
Jenny now seeks your advice. She considers that MSN and Bruce have misdescribed
the terms and acted unfairly in light of her circumstances. She cannot afford to continue
with a charge of $352 per month. She considers that rather than cancel ing the service,
she is entitled to a service of 2 hours of Amazons games each week for a charge of
$112. If al else fails she wil accept cancellation.
END OF EXAMINATION
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