Australia: Country and Consumer Pulse (May 2010)

Hot topics in May 2010:

  • Interest rate rises in danger of crushing home ownership dreams;
  • Young consumers have ‘loose’ ethics;
  • How Victorians complain.

Interest rate rises in danger of crushing home ownership dreams

More than 90,000 recent first-home buyers in Australia could be forced out of their homes because interest rates have risen faster than expected. Rates have now risen six times since October 2009, reaching 4.5%, and further increases are anticipated.

The latest 0.5 percentage point hike means repayments on an A$300,000 mortgage will increase by about A$50 a month, to nearly A$2000. Martin North, Fujitsu’s consulting executive director, says “People who get in mortgage stress end up selling up. It’s horribly predictable.”

However, not everyone is sympathetic: According to one internet poster, “So these first home buyers buy when interest rates are at record lows, and then complain they can’t afford interest rate rises? What did they expect? Why didn’t they work out a budget with leeway for higher interest rates? I have little sympathy.”

Young consumers have ‘loose’ ethics

Young Australian consumers have ‘loose’ ethics, with a third happy to pocket cash that is not theirs and half comfortable with seeking a refund for used goods, according to a study conducted by Dr. Larry Neale of Queensland University of Technology.

The trend has been blamed on new technology, including the rise of self-service transactions, as well as the common perception that businesses are purely out to make as much money as they can. “Businesses cannot rely on their customers to always do the right thing,” says Dr. Neale: “Customers who receive less cash than they should when withdrawing from an ATM will likely contact the bank and report the discrepancy. Those customers who receive a cash windfall from the ATM are less likely to contact the bank and refund their windfall.”

How Victorians complain

Diners in Victoria are increasingly complaining in pubs and restaurants regarding portion sizes, with some getting their money back after voicing their displeasure regarding miserly servings. A customer told Consumer Affairs Victoria she scored a refund after counting what was on her plate: two thin pieces of beef, two cauliflower florets, two zucchini cubes and nine beans.

The report was among 8,000 inquiries about refund rights recorded in Victoria during 2009. Some of the more bizarre complaints include a woman upset because the bong she bought did not produce a promised “higher state of mind” and the mother of a bride who unsuccessfully sought a refund (but was offered a repair) for a dress after the zip split on the wedding day.