The Cabinet this month endorsed a bill to create a new system to help consumers suffering financial damage from malicious sales and business practices. The new bill would allow consumer organizations to file lawsuits against businesses that cheat, swindle or otherwise harm consumers.
Currently, they can only ask businesses to stop harmful practices through lawsuits. On top of that, the new bill will allow them to file lawsuits to get compensation or to retrieve unjust profits gained by businesses. The added strength to launch litigation with real consequences is long overdue.
Until now, consumers who entered into contracts for services such as English lessons or aesthetic treatments had a hard time canceling or changing their contracts. Many businesses would simply ignore attempts to change or cancel contracts, though legally consumers are allowed to do so. If the company refused, the only recourse for those customers would be to hire a lawyer, which could be more expensive than the refund. Most consumers would have to give up and resign themselves to being cheated.
Now, however, the government will allow consumer organizations to file lawsuits on behalf of victimized consumers to stop questionable business practices as well as to get compensation or retrieve unjust profits realized by businesses.
Being allowed to file lawsuits is important because those organizations will now be using legal power, with serious consequences, to ensure that contracts are handled fairly and consumers well protected. Knowing they could become a target of a lawsuit by a government-sanctioned consumer organization, businesses will become more cautious about engaging in illegal, quasi-legal or malicious practices.
The other benefit of this change will be accumulating data on how widespread fraudulent business practices really are. Up to now, many consumers had to simply give up their search for retribution, without help or leaving any record. One big advantage of setting up such a system is to more comprehensively monitor and record these problems and find better courses of action.
Instead of curbing abuses through individual lawsuits, which can be expensive, time-consuming and not necessarily productive, the organizations can rely on consistent application of principles and establish meaningful precedents.
That means the consumer organizations will be working more efficiently for the overall public good. Individual cases will now be able to combine in a consistent way to address the same problems. That will benefit all consumers.
The government should implement this system of class action by consumer organizations as soon as possible and be sure to notify the public about how to best utilize the system. Widespread awareness of the problems of consumer contracts and the threat of action against harmful business practices will also boost consumer confidence and ensure that the long-awaited economic upturn, if it arrives, will be fair and equal for all consumers.