Regulation by CAV involves the implementation and enforcement of laws to influence the behaviour of regulated entities, to ensure a fair, safe and competitive Victorian marketplace, where businesses and rental providers do the right thing and Victorians exercise their consumer rights.
CAV’s regulatory approach is intelligence-led, risk-based and outcome-focused.
This approach enables us to target conduct which poses the highest risk to Victorians, while making best use of our available resources. This is described in further detail below and illustrated in Figure 1.
Figure 1: CAV’s approach to managing regulatory risks
Intelligence-led
A core element of CAV’s regulatory approach is the effective use of intelligence to inform decision making about how to manage key compliance risks.
Intelligence obtained during our regulatory operations is supplemented by other sources, including information shared among ACL regulators and from local councils, state regulators and law enforcement agencies. CAV is also exploring digital technologies including social media, online forums, artificial intelligence, and sophisticated data analytics to gain greater insights into consumer harms and better target our interventions.
An important source of intelligence is information provided by industry stakeholders, peak body representatives, community advocates and members of the community. CAV receives a large number of reports from consumers about business conduct or potential breaches of the law. While we do not pursue all of these individually, we use them as an important source of information that helps us assess risks and take action as appropriate.
Risk-based
Where possible, we aim to identify and treat risks before they lead to actual consumer harm.
Regulatory risks are market behaviours that:
- represent non-compliance with the laws we administer
- present potential or realised consumer harm
- impact our ability to be an effective regulator
- require a regulatory response due to public concern.
We put our effort where it counts and target the areas of greatest risk of consumer harm.
CAV monitors markets, and uses evidence to shape a targeted compliance program, focusing on those issues that pose the highest risk to Victorians. Levels of risk are determined by:
- the willingness and ability of an entity to comply with their regulatory obligations,
- the vulnerability to harm of the affected consumers, and
- the likelihood, consequence and evidence of consumer harm.
Risks can take many forms, for example, risks posed by a particular product; by the conduct of an individual business; by a new or emerging business practice; or by the conduct or business model of an entire industry.
This approach recognises while it may not be practical or appropriate to take compliance and enforcement action in response to every risk, we focus our resources on conduct that may cause the greatest harm to consumers or markets. It also helps us to determine the most appropriate action, commensurate with the level of risk, to achieve the most effective outcome. This ensures we focus on harms that matter most, and where a regulatory intervention can meaningfully change outcomes, strengthen market norms or prevent ongoing detriment.
Outcome-focused
CAV uses a range of compliance tools that are appropriate and proportionate to the harms we seek to address and the market outcomes we seek to achieve. These outcomes focus on preventing or minimising consumer harm, strengthening market integrity, and supporting fair trading behaviours that persist beyond individual enforcement actions.
CAV takes enforcement action that both promotes and is in the public interest, that is, for the welfare and good of the general public or community as a whole. Our focus is not limited to securing sanctions for non-compliance; a central priority is achieving meaningful remediation for consumers who have been harmed. We design enforcement responses to stop the conduct, deter future breaches, and ensure affected consumers are appropriately compensated or supported wherever possible.
Given CAV’s broad regulatory remit, exercising discretion is a necessary part of how we operate. We think beyond traditional assumptions about enforcement. We will commence court proceedings as and when necessary to enforce against non-compliance while recognising there may be other ways to achieve regulatory outcomes and taking alternative approaches where appropriate.
CAV’s regulatory response to non-compliance will be proportionate and appropriate to the outcomes we seek to achieve, taking into account the overall circumstances of the non-compliance and consumer harms, and our capacity to implement an effective and timely response. From direct interventions to collaborative solutions, we adapt our approach to create the greatest harm-reduction impact with the tools available.