We are grateful to Professor Kathleen C. Engel of Suffolk University Law School for providing this guest post on the International Association of Consumer Law biannual conference:
Every two years, consumer law academics from around the world gather to present their research and discuss their countries’ credit markets and consumer protection laws. This year, the International Association of Consumer Law held its biannual conference at the University of Sydney. Given Australia’s extraordinary success protecting consumers while providing broad access to capital, the setting was fitting.
The conference delegates hailed from Taiwan, Brazil, South Africa, China, Finland, Indonesia, Japan, Malaysia, the UK, and many other countries. There were well over sixty papers presented as as enlightening talks by Australian regulators, ombudspeople, and members of the judiciary.
For me, the highlight of IACL conferences is the opportunity to learn about the experiences of other countries—the challenges they face in making affordable credit available, the structure of their credit markets, their consumer regulatory systems, and the protections they provide consumers. At the end of the day, the balance between protecting consumers and ensuring access to credit seems to be
the core issue in all countries.
The individual papers were outstanding and I wish I could write a synopsis of each of them. Instead, I will highlight a few of themes. One distressing theme was that while many countries have strengthened their consumer laws in recent years, widespread exploitation of consumers continues. During one session, the audience was exuding envy at a description of Brazil’s consumer protections, which are Constitutional, only to find that abuses continue there. Why? Because the profits to be made through unlawful loans far exceed any consequences for making such loans. Brazil is not alone.
Switching gears, Sharia complaint financing was on the conference agenda. In western countries,there are structural barriers to Islamic financing, such as how to develop credit products that do not have any interest features and developing a secondary market for such products. There are also concerns about how to reconcile Islamic financing with extant consumer protection laws. For example, with some types of Sharia compliant financing, homes are under “underwater” from the outset, which could run afoul of loan-to-value limits. Even in countries where there are significant Muslim populations, there are issues of bank compliance with both religious and secular law.
Big data and the internet came up at a number of sessions. For years, people have talked about how lenders can dupe consumers because of inequalities in their understanding of credit terms and unequal bargaining power. There is another growing power imbalance: the private sector has more information on individual consumers’ spending habits and credit histories than the consumers themselves have. Industry can use this information to target consumers with specific products, but consumers don’t have information on their spending patterns that would help them make informed choices.
The intersection of the internet and consumer protection gave rise to a host of papers, including the question: what is applicable law in cross-border transactions? What consumer law applies if I use the internet to rent an apartment in Shanghai that is owned by someone in Pretoria? No easy answers to this question.
If you want to learn more about the conference, the program with presenters’ names and the titles of their presentations is available at: http://www.iaclsydney2013.com/program_full.html.My final thought is actually an expression of thanks to Gail Pearson, Professor at the University of Sydney, who hosted and planned a flawless conference.