What Happens to Consumer Equity During a Pandemic?
(COVID-19 Blog Series)

By Professor Jeannie Paterson
Co-leader, Digital Access and Equity Research Program, Melbourne Social Equity Institute
Co-director, Centre for AI and Digital Ethics

Wednesday 20 May 2020

During the COVID-19 restrictions, I have been working from home with the rest of my family. I have been thankful for our relatively comfortable working environment and reasonably functional internet. Like many people, I have worried for my parents in another state.

As well as teaching and researching, I have been doing lots of ‘media’ on issues of consumer rights. I have spoken and written on hand sanitisers, refunds for cancelled flights and holidays, and online sale of fake virus cures.

From one perspective, these might seem like trivial issues, involving consumer purchases not human rights. But what these various discussions have brought home to me is the way our consumer protection regime is still commonly premised on a two-tier scheme, which privileges the so-called ‘average’ consumer, who is ‘reasonably well-informed, reasonably observant and circumspect’, (to use the language of the EU Unfair Commercial Practices Directive, Recital 18 ) over ‘vulnerable’ consumers who are subject to ‘special’ protections under the law. Yet this distinction is utterly unsound and works against the interests of people who, through no fault of their own, are confused, manipulated or mislead.

The issue of hand sanitiser involves a distinction between a therapeutic product, which if made in accordance with the WHO formula, is considered effective against the coronavirus and a cosmetic product that may kill ‘bacteria’ but not a ‘virus’. This distinction – two products, same name, two different effects – does not appear to be considered problematic by the regulator or the government. But for this scenario not to be misleading, there must be an assumption that the ‘average’ consumer is a person who researches the effectiveness of different hand sanitisers before shopping, as opposed to relying on the label which purports to sanitise hands. As the blog by my good colleague Shanton Chang eloquently explained, we are all subject to information overload and time pressures at this time of stress and uncertainty. The effect of the distinction is to institutionalise a high bar for access to consumer protection.

The problem of refunds for cancelled flights raises similar concerns. Here many airlines have been offering vouchers, as opposed to monetary refunds, for cancelled flights. Why is this a problem? Well, it impinges on consumers who may not be able to travel again within the one- or two-year period allowed under the voucher. Think perhaps of the family who booked a special holiday which they can no longer afford. Now many airlines will give a refund to consumers who call up about it. However, this practice privileges consumers who feel they have the expertise to complain.

Finally, the online sale of fake cures by so-called ‘snake oil merchants’ has been a sad but all too frequent occurrence during this pandemic. This conduct is clearly misleading, but the very test of misleading conduct distinguishes between the inferences that might be drawn by the average consumer, who takes responsibility for his or her own interests, and the other kind of consumer, who is sometimes described as ‘foolish’ or ‘gullible’. Again, it might be thought that consumers should be more careful and circumspect when they buy. But when we are under pressure, and even afraid, people try to do what they can to protect their families or communities. This is not foolish but instead completely understandable.

At the end of the day, consumer law should be framed in a way that is accessible to all real consumers, not a fictionalised model of a rational ‘reasonable man’.

Professor Jeannie Paterson specialises in the areas of contracts, consumer rights and consumer credit law, as well as the role of new technologies in these fields. She co-leads the Melbourne Social Equity Institute’s Digital Access and Equity Research Program and is the co-director of the Centre for AI and Digital Ethics (CAIDE), a new collaborative, interdisciplinary research, teaching and policy centre at the University of Melbourne involving the faculties of Computing and Information Systems, Law, Arts and Science.