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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
TREASURY LAWS AMENDMENT (AUSTRALIAN CONSUMER LAW REVIEW)
BILL 2018
REVISED EXPLANATORY MEMORANDUM
(Circulated by authority of the
Assistant Minister to the Treasurer, the Hon Michael Sukkar MP)
THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE HOUSE OF
REPRESENTATIVES TO THE BILL AS INTRODUCED
Table of contents
Glossary................................................................................................. 1
General outline and financial impact ...................................................... 3
Chapter 1 Australian Consumer Law Review ............................... 5
Chapter 2 Statement of Compatibility with Human Rights .......... 19
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
ACCC Australian Competition and Consumer
Commission
ACL Australian Consumer Law; Schedule 2 to the
Competition and Consumer Act 2010
ACL Review Australian Consumer Law Review
ASIC Australian Securities and Investments
Commission
ASIC Act Australian Securities and Investments
Commission Act 2001
Bill Treasury Laws Amendment (Australian
Consumer Law Review) Bill 2018
CCA Competition and Consumer Act 2010
1
General outline and financial impact
Treasury Laws Amendment (Australian Consumer Law
Review) Bill 2018
This Bill amends the ASIC Act, ACL and CCA to give effect to a number
of proposals suggested in the Australian Consumer Law Review - Final
Report (ACL Review Final Report).
The amendments clarify and strengthen consumer protections relating to
consumer guarantees, unsolicited consumer agreements, product safety,
false billing, unconscionable conduct, pricing and unfair contract terms.
Date of effect: The day after this Bill receives the Royal Assent.
Proposal announced: The measures were included in the ACL Review
Final Report which was released in April 2017. The measures were
approved by the Legislative and Governance Forum on Consumer Affairs
on 31 August 2017.
Financial impact: Nil
Human rights implications: This Bill does not raise any human rights
issues. See Statement of Compatibility with Human Rights - Chapter 2,
paragraphs 2.1 to 2.69.
3
Chapter 1
Australian Consumer Law Review
Outline of chapter
1.1 This Bill amends the ASIC Act, ACL and CCA to give effect to
a number of proposals suggested in the Australian Consumer Law
Review - Final Report (ACL Review Final Report).
1.2 The amendments clarify and strengthen consumer protections
relating to consumer guarantees, unsolicited consumer agreements,
product safety, false billing, unconscionable conduct, pricing and unfair
contract terms.
Context of amendments
1.3 On 12 June 2015, Commonwealth, State and Territory
Consumer Affairs Ministers, through the Legislative and Governance
Forum on Consumer Affairs, asked Consumer Affairs Australia and
New Zealand to initiate a broad-reaching review of the ACL, the 'ACL
Review'.
1.4 The intent of the ACL Review was to assess the effectiveness of
the ACL provisions, including the ACL's flexibility to respond to new and
emerging issues and the extent to which the national consumer policy
framework had met the objectives set by the Council of Australian
Governments. The Review was also tasked with considering the
application of the ACL provisions that are mirrored in the ASIC Act.
1.5 The ACL Review Final Report was released in April 2017,
following significant public consultation.
1.6 On 31 August 2017, the Legislative and Governance Forum on
Consumer Affairs agreed to legislate the proposals reflected in this Bill.
1.7 The amendments strengthen and clarify the consumer protection
regime to ensure that consumers are well-informed, assist consumers and
traders to better understand their rights and obligations, and future-proof
the regime.
Summary of new law
1.8 This Bill amends the ASIC Act, ACL and CCA to give effect to
a number of proposals recommended in the ACL Review Final Report.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
1.9 The amendments:
• ease the evidentiary requirements so that a party bringing
proceedings may rely on both admissions of fact and findings
of fact made in other proceedings (see paragraphs 1.10 to
1.19);
• extend the unconscionable conduct protections to publicly
listed companies (see paragraphs 1.20 to 1.25);
• ensure that the unsolicited services provisions operate as
intended by including services that were not actually supplied
(see paragraphs 1.26 to 1.31);
• clarify that an unsolicited consumer agreement may be
entered into in a public place (see paragraphs 1.32 to 1.35);
• enhance price transparency by requiring that additional fees
or charges associated with pre-selected options are included
in the headline price (see paragraphs 1.36 to 1.41);
• strengthen the Minister's and regulator's powers to obtain
information about product safety (see paragraphs 1.42 to
1.48);
• enable regulators to use investigative powers to better assess
whether or not contract terms are unfair (see paragraphs 1.49
to 1.52);
• give courts the power to require a person in contravention of
the ACL to engage a third party to give effect to a
community service order (see paragraphs 1.53 to 1.56);
• clarify the scope of consumer guarantees where goods are
transported or stored (see paragraphs 1.57 to 1.62);
• ensure that the terminology used in the consumer protection
provisions in the ASIC Act relating to land are consistent
with similar provisions in the ACL (see paragraphs 1.63 to
1.69); and
• clarify that the ACL-related consumer protections that apply
to financial services also apply to financial products under
the ASIC Act (see paragraphs 1.70 to 1.75).
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Australian Consumer Law Review
Comparison of key features of new law and current law
New law Current law
Evidentiary burden
Expanded 'follow-on' provisions Findings of fact made by a court in
allow private litigants to rely on certain proceedings against a person
admitted facts from earlier may be used in certain other
proceedings. proceedings against that person under
the Act. Admitted or agreed facts by
the person may not be relied on.
Unconscionable conduct
Unconscionable conduct against a Unconscionable conduct against a
person is prohibited, including where person is prohibited except where the
the person is a publicly listed person is a publicly listed company.
company.
Unsolicited consumer agreements
The operation of unsolicited Section 69 of the ACL defines
consumer agreements in section 69 is unsolicited consumer agreements.
clarified but not altered to make clear
that an unsolicited consumer
agreement applies where a dealer
meets a consumer away from the
supplier's business or trade premises,
including a public place.
Amounts included in the single price
Fees or charges associated with The single price for the supply of a
pre-selected options must be included good or service must include charges
in the single price. payable by a person except a charge
that is optional.
Product Safety
The ACCC is able to require The ACCC can only require a
information about unsafe products, supplier to provide information about
including from third parties. unsafe products.
Unfair contract terms
ACCC and ASIC's investigative ACCC and ASIC's investigative
powers allow for investigations of powers do not allow for
possible unfair contract terms. investigations of possible unfair
contract terms.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
New law Current law
Penalties and remedies
The remedies available to a court are Section 246 sets out the remedies
expanded to give the court the power available to a court where a person
to require the person in contravention contravenes the ACL but does not
of the ACL to engage a third party to specifically allow a court to direct a
perform the required community person to engage a third party to
service. perform a required community
service.
Consumer guarantees
The exemption from the requirement ACL includes an exemption from the
to provide a consumer guarantee for requirement to provide a consumer
the transport or storage of goods is guarantee for the transport or storage
clarified so that it only applies where of goods in certain circumstances.
both the consignor and consignee are
a business. The exemption does not
apply where the consignee is a
consumer.
Financial products
The ACL-related consumer The ACL-related consumer
protections in the ASIC Act are protections in the ASIC Act apply to
clarified to specifically apply to financial services.
financial products as well as financial
services.
Technical amendments
The definition of unsolicited services Unsolicited services are defined as
is amended to also include services services which were supplied but not
which were unrequested and not requested by a person.
actually supplied.
Section 12DC of the ASIC Act is Section 12DC of the ASIC Act refers
amended to refer to the 'supply or to representations in connection with
possible supply' of a financial 'the sale or grant, or the possible sale
product that includes an interest in or grant' of a financial product that
land. The provision also applies to a includes an interest in land.
financial product that may
subsequently include an interest in
land.
Detailed explanation of new law
Easing the evidentiary burden for litigants (Proposal 17 of the ACL
Review)
1.10 Consumers harmed by a contravention of the consumer law can
seek relief by commencing a private action before the Federal Court.
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Australian Consumer Law Review
1.11 Existing section 137H of the CCA is intended to facilitate
actions by private litigants by enabling findings of fact made against a
person in one proceeding, typically brought by the ACCC, to be used as
prima facie evidence against the person in another proceeding.
1.12 This mechanism helps to reduce the cost of private actions, as a
person relying on a previous finding of fact as prima facie evidence does
not need to establish that fact.
1.13 However, admissions of fact by a respondent cannot easily be
relied on by a litigant in a subsequent action. The consequence of this is
that essential issues that were relied upon by a court in finding a
contravention in an earlier proceeding are not prima facie evidence of
those matters in a subsequent action.
1.14 Typically, regulators will undertake enforcement action in the
broader public interest and prioritise remedies which reflect this objective
and deter future breaches of the law. However, private litigants pursuing
their own remedies for a similar contravention must re-establish
admissions made in an earlier proceeding because a 'follow on' provision,
which allows these admissions to be prima facie evidence, does not exist.
1.15 Schedule 1 to the Bill amends section 137H to extend the
'follow-on' provisions in the consumer law context to enable private
litigants and regulators to rely on admissions made by the respondent as
well as facts established in earlier proceedings as evidence in their own
case. Agreed facts from earlier proceedings will remain available to
litigants. [Schedule 1, items 1 to 3, section 137H of CCA]
1.16 "Follow-on" provisions remove barriers for consumers seeking
to use legal remedies by effectively placing the evidentiary burden on the
defendant.
1.17 These provisions are consistent with recent changes to
competition provisions in the CCA as recommended by the Harper
Review.
1.18 Evidentiary certificates will be issued by a responsible officer
who is independent from the prosecution.
1.19 The amendments apply in relation to findings of fact and
admissions of fact made on or after the commencement of the Bill.
[Schedule 1, item 4]
Extending unconscionable conduct protections to publicly-listed
companies (Proposal 9 in the ACL Review)
1.20 Existing section 12CB of the ASIC Act currently prohibits
unconscionable conduct by a person in trade or commerce in connection
with the supply or possible supply of financial services to a person, or
acquisition or possible acquisition of financial services from a person.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
1.21 Similarly, section 21 of the ACL prohibits unconscionable
conduct by a person in trade or commerce in connection with the supply
or possible supply of goods or services to a person, or acquisition or
possible acquisition of goods or services from a person.
1.22 However, the unconscionable conduct provisions do not
currently extend the statutory protections to publicly-listed companies.
1.23 Schedule 2 to the Bill amends section 12CB of the ASIC Act,
section 131 of the CCA and section 21 of the ACL to extend statutory
unconscionable conduct protections to publicly-listed companies.
[Schedule 2, items 1, 3 and 5, paragraphs 12CB(1)(a) and 12CB(1)(b) of the ASIC Act,
subparagraphs 131(2)(a)(i) and 131(2)(a)(ii) of the CCA and paragraphs 21(1)(a) and
21(1)(b) of the ACL]
1.24 As a result, the definition of 'listed public company' is no longer
required and is repealed from the ASIC Act and ACL. [Schedule 2, items 2
and 4, subsection 12CB(5) of the ASIC Act and subsection 2(1) of the ACL]
1.25 The amendments apply to acts or omissions that occur on or
after the Bill commences. [Schedule 2, item 6; Schedule 12, items 1 and 2,
section 315 of the ASIC Act and section 296 of the ACL]
Clarifying the definition of 'unsolicited services' (Technical
Amendment A in the ACL Review)
1.26 Currently, subsection 40(2) of the ACL prohibits a person in
trade or commerce asserting a right to payment for unsolicited services
unless the person has reasonable cause to believe there is a right to the
payment.
1.27 Subsection 40(3) of the ACL and associated regulations also
currently prohibit a person in trade or commerce from sending an invoice
that:
• states the amount of a payment, or sets out the charge, for
supplying unsolicited services; and
• does not contain a warning statement 'This is not a bill. You
are not required to pay any money'.
unless the person has reasonable cause to believe that there is a right to the
payment or charge.
1.28 The existing definition of unsolicited services at subsection 2(1)
of the ACL is limited to services actually supplied to a person without the
person requesting the services.
1.29 Schedule 3 to the Bill amends the definition of 'unsolicited
services' so it also includes unrequested services which are purported to
have been supplied but have not actually been supplied. [Schedule 3, item 1,
subsection 2(1) of the ACL]
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Australian Consumer Law Review
Example 1.1
LIMPEZ Pty Ltd sends a letter which looks like an invoice to Jason for
a remote virus scan of his computer that it claims to have performed
Jason did not ask for the services to be supplied. Furthermore,
LIMPEZ Pty Ltd did not actually scan Jason's computer for viruses.
The services LIMPEZ Pty Ltd is asserting to have supplied meets the
definition of unsolicited services.
LIMPEZ Pty Ltd has contravened the false billing prohibition and may
be subject to a pecuniary penalty, as well as civil proceedings for
damages, other remedial orders or an injunction.
1.30 This allows for better enforcement and operation of the false
billing provisions under sections 40, 42 and 162 of the ACL. [Schedule 3,
items 2 to 5, paragraph 40(3)(a), section 42, paragraphs 42(b) and 162(3)(a) of the ACL]
1.31 The revised definition of 'unsolicited services' applies to acts or
omissions that occur on or after the Bill commences. [Schedule 12, item 2,
section 297 of the ACL]
Clarifying the operation of unsolicited consumer agreements in public
places (Proposal 12 in the ACL Review)
1.32 Schedule 4 to the Bill amends the unsolicited consumer
agreement provisions at section 69 of the ACL to clarify when an
agreement is covered by that section.
1.33 Currently, subparagraph 69(1)(b)(i) provides that an agreement
which is the result of negotiations between a consumer and dealer at a
place other than the supplier's place of business would be an unsolicited
consumer agreement. Certain other conditions need to be met including
that the consumer did not invite the dealer to come to that place.
1.34 Schedule 4 to the Bill clarifies that such a place could be a
public place, even though a consumer's invitation is not required for the
dealer to enter a public place. [Schedule 4, item 1, subsection 69(1) of the ACL]
Example 1.2
Anna takes her newborn baby for a walk around the local lake. Ruth
operates a small business supplying photographic services and she
frequently goes to public walking areas to look for prospective clients.
Ruth approaches Anna to tell her about her photography business and
Anna agrees to purchase $800 worth of baby photos.
Although the lake is a public place and Ruth does not need an
invitation to enter, the agreement is an unsolicited consumer
agreement.
1.35 The amendments apply in relation to acts or omissions that
relate to agreements entered into on or after the Bill commences.
[Schedule 12, item 2, section 298 of the ACL]
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
Ensuring all pre-selected options are included in the single price
(Proposal 13 in the ACL Review)
1.36 Currently, paragraph 48(7)(a) of the ACL provides that a charge
of any description payable to a person making a representation (the
'seller') by another person (the 'customer') is included in the single price
or 'headline price'. However, there is an exception for optional charges.
That is, an optional charge does not need to be included in the headline
price.
1.37 This has meant that the headline price for a good or service has
not always represented the total price of the good or service where the
person offering the good or service has pre-selected options. This has been
a particular issue for online sales.
1.38 If a consumer does not specifically de-select the pre-selected
options they will be charged a higher price than the single price. It can be
difficult for some consumers to identify all the pre-selected options in a
transaction. Under the current definition, as the pre-selected charges are
optional, the pre-selected charges do not need to be included in the
headline price.
Example 1.3
Alex is looking for an airline ticket.
He finds a ticket advertised by Viagem Airlines for $500. However,
Viagem Airlines pre-selects an option for carbon offsetting, priced at $5.
As soon as Alex clicks through to the Viagem Airlines website the
ticket that he thought was $500 becomes $505.
1.39 Schedule 5 to the Bill amends the provisions relating to a single
price so that the headline price must include charges automatically applied
by the seller, even though, during the transaction, the customer may
deselect these options. [Schedule 5, items 1 and 2, paragraph 48(7)(a) and
subsection 48(7) of the ACL]
1.40 The seller must include in the headline price a charge payable by
the customer unless, before the seller made the representation, the
customer had deselected the charge, or not asked that the charge be
applied.
Example 1.4
The amendments included in this Bill have now taken effect.
Alex is looking to purchase an airline ticket.
He again finds a ticket with Viagem Airlines. The ticket is priced at
$505. This includes a carbon offset of $5 which has been pre-selected
by the airline.
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Australian Consumer Law Review
He clicks through to the Viagem Airlines' website. This time the price
remains $505 as the price for the carbon offset is included in the
advertised price.
When buying the ticket, Alex de-selects the carbon offset. The price is
reduced to $500, which is the amount Alex pays for his ticket.
Example 1.5
Alex finds a ticket with Taube Airlines, a discount airline. It offers a
number of options for its customers to select when purchasing a ticket,
including additional baggage, inflight movies and meals.
None of these options are pre-selected.
Taube Airlines does not need to include the prices for these options in
the headline price as the options are not pre-selected. If Alex selects
the additional services and options, the cost would be added to the
overall charge for the airline ticket.
1.41 The amendments apply in relation to acts or omissions which
occur on or after the day that is 12 months after commencement. This
provides sellers with time to alter their systems. [Schedule 12, item 2,
section 299 of the ACL]
Strengthening the ACCC's powers to obtain information (Proposal 8 in
the ACL Review)
1.42 Existing section 133D of the CCA gives the Commonwealth
Minister or an ACCC appointed inspector the power to issue disclosure
notices to obtain information about the safety of goods or services.
However, disclosure notices can only be issued to a supplier who, in trade
or commerce, supplies consumer goods or product related services.
1.43 This restriction has prevented disclosure notices being issued to
other parties who may possess relevant information, documents or
evidence about the safety of goods and services. These other parties could
include:
• other traders;
• test laboratories;
• safety consultants;
• consumers who have purchased or been injured by a
hazardous product; or
• a person injured by a hazardous product.
1.44 It is not always possible or appropriate for the ACCC to obtain
this information from other parties voluntarily, particularly where they
may be subject to legal or confidential restrictions.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
1.45 Schedule 6 to the Bill broadens the Minister and an inspector's
powers to allow the Minister or inspector to give a disclosure notice to a
third party. [Schedule 6, items 1 to 3, section 133D of the CCA]
1.46 The Minister or inspector may give a notice if he or she has
reason to believe that the person is capable of giving information,
producing documents or giving evidence in relation to the safety of those
consumer goods or product related services.
1.47 Existing subsection 133E(1) operates to provide that a person
cannot refuse to provide the necessary information or documents on the
basis that doing so would result in self-incrimination. However, existing
subsection 133E(2) will operate to provide that the information or
documents cannot be used as evidence in criminal proceedings except to
the extent that the proceedings relate to compliance with a disclosure
notice or the provision of false or misleading information in response to a
disclosure notice as provided for in subsection 133F and 133G.
1.48 The amendments apply in relation to disclosure notices given on
or after the commencement of the Bill. [Schedule 6, item 4]
Enabling regulators to use investigative powers to assess unfair contract
terms (Proposal 11 in the ACL Review)
1.49 Currently, the ACCC and ASIC are restricted in their ability to
investigate compliance and take enforcement action with respect to unfair
contract terms. This is because their investigative powers are triggered by
'contraventions' or 'possible contraventions' of the law.
1.50 As the use of unfair contract terms is not prohibited by the law it
is not possible to breach or contravene these provisions in the law.
1.51 Schedule 7 to the Bill amends section 13 of the ASIC Act and
155 of the CCA to extend ASIC and the ACCC's respective investigative
powers to enable those regulators to undertake investigations to determine
if a term in a contract may be unfair. [Schedule 7, items 1 and 2, subsections
13(7) and 13(8) of the ASIC Act and paragraph 155(2)(b) of the CCA]
1.52 The amendments apply in relation to contracts entered into on or
after the Bill commences. [Schedule 7, item 3; Schedule 12, item 1, section 316 of
the ASIC Act]
Requiring third parties to give effect to a community service order
(Proposal 19 in the ACL Review)
1.53 Existing paragraph 246(2)(a) of the ACL allows regulators to apply
to the court for a community service order as a remedy where a person has
contravened, or has been involved in a contravention of, the ACL.
1.54 Schedule 8 to this Bill amends section 246 to clarify that a court
may issue a community service order requiring the person to engage a third
14
Australian Consumer Law Review
party, at the person's expense, to perform the service required in the order.
[Schedule 8, items 1 and 2, paragraphs 246(2)(a) and subsection 246(2) of the ACL]
1.55 A court may consider using this remedy when the person in
breach is not qualified or trusted to give effect to an order. For example, a
court may consider that it is not appropriate for a person who has caused
financial harm to low-income or vulnerable people to provide financial
counselling to those people.
1.56 The amendments apply to orders relating to acts or omissions
which occur on or after the day the Bill commences. [Schedule 12, item 2,
section 300 of the ACL]
Clarifying the scope of the exemption from the consumer guarantees for
the transport or storage of goods (Proposal 5 in the ACL Review)
1.57 Part 3-2, Division 1 of the ACL contains the consumer
guarantees regime. The regime sets out a number of statutory guarantees
that apply to all consumer transactions. Subdivision A relates to the
supply of goods, while Subdivision B relates to the supply of services.
1.58 In relation to the supply of services, the consumer guarantees
include a requirement that services must be provided with due care and
skill (section 60), fit for a particular purpose (section 61) and supplied
within a reasonable amount of time (section 62).
1.59 Section 63 of the ACL outlines services to which the guarantees
regime does not apply (exemptions).
1.60 Paragraph 63(a) currently provides that the consumer guarantees
do not apply to services that are supplied under 'a contract for or in
relation to the transportation and storage of goods for the purpose of a
business, trade, profession or occupation carried on or engaged in by the
person for whom the goods are transported'.
1.61 Schedule 9 to the Bill clarifies that this exemption only applies
to the extent that the goods being transported relate to a consignee's
business. It does not apply where the goods being transported are for the
consignee's personal use. [Schedule 9, items 1 and 2, section 63 of the ACL]
Example 1.6
Nik is an artist who works from home.
Nik purchases a set of paint brushes which he will use to paint art for
sale. Nik also purchases a tracksuit to wear when exercising. Nik pays
to have both items delivered to his home.
As Nik purchased the paint brushes to use in his occupation as an artist
he will not be able to rely on the consumer guarantees if the
paintbrushes are damaged in transit and he wishes to pursue a
complaint against the courier.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
However, as Nik purchased the tracksuit for personal use he will be
able to rely on the consumer protections if the tracksuit is damaged in
transit and he pursues a complaint against the courier.
1.62 The amendments apply to services which are supplied under a
contract entered into on or after the day the Bill commences. [Schedule 12,
item 2, section 301 of the ACL]
Correcting inconsistent terminology in the ASIC Act for financial
products that involve interests in land (Technical Amendment B in the
ACL Review)
1.63 Part 2, Division 2, Subdivision D of the ASIC Act sets out
consumer protections for financial services and mirrors a number of
provisions in the ACL including by importing the language used in the ACL.
1.64 Schedule 10 of the Bill amends section 12DC of the ASIC Act to
replace references to 'the sale or grant' or the 'possible sale or grant' of a
financial product that consists of, or includes, an interest in land with the
'supply or possible supply' of a financial product that consists of, or
includes, an interest in land. [Schedule 10, items 1 and 3, subsection 12DC(1) and
paragraph 12DC(2A)(b) of the ASIC Act]
1.65 The amendments are not intended to alter or amend the current
operation of that provision.
1.66 Schedule 10 of the Bill also amends the ASIC Act to clarify that
the consumer protections that apply in connection to a financial product
that consists of, or includes an interest in land also apply where the
representation occurred prior to the acquisition of the land. [Schedule 10,
items 2 and 4, subsections 12DC(1) and 12DC(2A)]
1.67 For example, the consumer protections apply to the promotion
of a registered or unregistered managed investment scheme that will
invest in property, or where a person recommends an investment in real
property using a self-managed super fund structure where no fund is yet
established.
1.68 There are other provisions in Part 2, Division 2, Subdivision D
of the ASIC Act which are not amended by this Bill and which also refer
to 'the sale or grant' or the 'possible sale or grant' of a financial product
that consists of, or includes, an interest in land. These provisions were not
considered as part of the ACL Review. It is not intended that these
provisions operate differently to the amended provision.
1.69 The amendments apply to acts or omissions which occur on or
after the Bill commences. [Schedule 12, item 1, section 317 of the ASIC Act]
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Australian Consumer Law Review
Clarifying that the consumer protections in the ASIC Act that apply to
financial services also apply to financial products (Proposal 16 in the
ACL Review)
1.70 Certain provisions in the ASIC Act are intended to mirror
certain provisions in the ACL, including the protections against
unconscionable conduct, misleading or deceptive conduct, and harassment
and coercion.
1.71 However, the existing provisions in the ASIC Act do not refer to
financial products as the definition of financial services is intended to
have a broad definition, which includes financial products.
1.72 Schedule 11 of the Bill amends the ASIC Act to clarify that the
consumer protections that already apply to financial services also apply to
financial products.
1.73 This is done by amending the definition of financial to include a
financial product. [Schedule 11, item 2, subsection 12BAB(1) of the ASIC Act]
1.74 The terms 'unsolicited financial products' and 'financial
products' are removed from certain provisions where the provision also
refers to financial services. This is because the amended definition of
financial services now specifically includes a financial product.
[Schedule 11, items 1 and 3 to 9, subsection 12BA(1), subparagraph 12BEA(1)(e)(iii),
subsection 12DM(1), paragraph 12DM(1AA)(a), section 12DMA, subsection 12DMB(1),
paragraph 12DMB(2)(a) and subsection 12DMB(4) of the ASIC Act]
1.75 The amendments apply in relation to acts or omissions which
occur on or after the day that the Bill commences. [Schedule 12, item 1,
section 318 of the ASIC Act]
17
Chapter 2
Statement of Compatibility with Human
Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
2.1 This Bill is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3
of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
2.2 This Bill amends the ASIC Act, ACL and CCA to give effect to
a number of proposals suggested in the Australian Consumer Law
Review - Final Report (ACL Review Final Report).
2.3 The amendments clarify and strengthen consumer protections
relating to consumer guarantees, unsolicited consumer agreements,
product safety, false billing, unconscionable conduct, pricing and unfair
contract terms.
2.4 On 12 June 2015, Commonwealth, State and Territory
Consumer Affairs Ministers, through the Legislative and Governance
Forum on Consumer Affairs, asked Consumer Affairs Australia and
New Zealand to initiate a broad-reaching review of the ACL, the 'ACL
Review'.
2.5 The intent of the ACL Review was to assess the effectiveness of
the ACL provisions, including the ACL's flexibility to respond to new and
emerging issues and the extent to which the national consumer policy
framework had met the objectives set by the Council of Australian
Governments. The Review was also tasked with considering the
application of the ACL provisions that are mirrored in the ASIC Act.
2.6 The ACL Review Final Report was released in April 2017,
following significant public consultation.
2.7 On 31 August 2017, the Legislative and Governance Forum on
Consumer Affairs agreed to legislate the proposals reflected in this Bill.
2.8 The amendments strengthen and clarify the consumer protection
regime to ensure that consumers are well-informed, assist consumers and
19
Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
traders to better understand their rights and obligations, and future-proof
the regime.
Schedule 1 - Admissions of fact
Overview
2.9 Typically, regulators will undertake enforcement action in the
broader public interest and prioritise remedies which reflect this objective
and deter future breaches of the law.
2.10 Consumers harmed by a contravention of the consumer law can
seek relief by commencing a private action before the Federal Court.
However, private litigants pursuing their own remedies for a similar
contravention must re-establish admissions made in an earlier proceeding
because a 'follow on' provision, which allows these admissions to be
prima facie evidence, does not exist.
2.11 The consequence of this is that essential issues that were relied
upon by a court in finding a contravention in an earlier proceeding are not
prima facie evidence of those matters in a subsequent action.
2.12 Schedule 1 to this Bill amends section 137H to extend the
'follow-on' provisions in the consumer law context to enable private
litigants and regulators to rely on admissions made by the respondent as
well as facts established in earlier proceedings as evidence in their own
case. Agreed facts from earlier proceedings will remain available to
litigants.
Human rights implications
2.13 This Schedule engages the right to a fair trial and fair hearing,
specifically, the rules of evidence in courts or tribunals.
2.14 The rules of evidence in courts are affected by the amendment as
it will alter the existing approach applicable to prima facie evidence in
subsequent proceedings.
Conclusion
2.15 Engaging the right to a fair trial and fair hearing, specifically,
the rules of evidence in courts or tribunals in this way is necessary and
justified.
2.16 'Follow-on' provisions remove barriers for consumers seeking
to use legal remedies by effectively placing the burden to rebut the prima
facie evidence on the defendant.
20
Statement of Compatibility with Human Rights
Schedule 2 - Listed public companies
Overview
2.17 Schedule 2 to the Bill amends the ASIC Act and the ACL to
extend statutory unconscionable conduct protections to publicly-listed
companies. As a result, the definition of 'listed public company' is no
longer required and is repealed from the ASIC Act and ACL.
2.18 While the unconscionable conduct provisions do not currently
extend the statutory protections to publicly-listed companies, this
amendment does not engage any of the applicable rights or freedoms.
Human rights implications
2.19 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.20 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 3 - Unsolicited supplies
Overview
2.21 Schedule 3 to the Bill amends the definition of 'unsolicited
services' so it also includes unrequested services which are purported to
have been supplied but have not actually been supplied.
2.22 Currently, subsection 40(2) of the ACL prohibits a person in
trade or commerce asserting a right to payment for unsolicited services
unless the person has reasonable cause to believe there is a right to the
payment.
2.23 The existing definition of unsolicited services at subsection 2(1)
of the ACL is limited to services actually supplied to a person without the
person requesting the services.
Human rights implications
2.24 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.25 This Schedule is compatible with human rights as it does not
raise any human rights issues.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
Schedule 4 - Unsolicited consumer agreements
Overview
2.26 Schedule 4 to the Bill amends the unsolicited consumer
agreement provisions at section 69 of the ACL to clarify when an
agreement is covered by that section.
2.27 Currently, subparagraph 69(1)(b)(i) provides that an agreement
which is the result of negotiations between a consumer and dealer at a
place other than the supplier's place of business would be an unsolicited
consumer agreement. Certain other conditions need to be met including
that the consumer did not invite the dealer to come to that place.
2.28 Schedule 4 to the Bill clarifies that such a place could be a
public place, even though a consumer's invitation is not required for the
dealer to enter a public place.
Human rights implications
2.29 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.30 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 5 - Pricing
Overview
2.31 The headline price for a good or service has not always
represented the total price of the good or service where the person offering
the good or service (the 'seller') has pre-selected 'options'. This has been
a particular issue for online sales.
2.32 If a consumer does not specifically de-select the pre-selected
options they will be paying a higher price than the single price which is
the price that was advertised. It can be difficult for some consumers to
identify all the pre-selected options in a transaction. As the pre-selected
charges are 'optional', the pre-selected charges do not need to be included
in the headline price.
2.33 Schedule 5 to the Bill amends the provisions relating to a single
price so that the headline price must include charges automatically applied
by the seller, even though during the transaction the consumer may
deselect these options.
22
Statement of Compatibility with Human Rights
Human rights implications
2.34 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.35 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 6 - Disclosure notices relating to the safety of goods or
services
Overview
2.36 The Commonwealth Minister or an ACCC appointed inspector
has the power to issue disclosure notices to obtain information about the
safety of goods or services, limited to a supplier who, in trade or
commerce, supplies consumer goods or product related services.
2.37 This restriction has prevented disclosure notices being issued to
other parties who may possess relevant information, documents or
evidence, about the safety of goods and services. These other parties could
include:
• other traders;
• test laboratories;
• safety consultants;
• consumers who have purchased or been injured by a
hazardous product; or
• a person injured by a hazardous product.
2.38 Schedule 6 to the Bill broadens the powers to allow the Minister
or inspector to give a disclosure notice to a third party.
2.39 The Minister or inspector may give a notice if he or she has
reason to believe that the person is capable of giving information,
producing documents or giving evidence in relation to the safety of those
consumer goods or product related services.
Human rights implications
2.40 This Schedule engages the right against self-incrimination under
article 14(3)(g) of the ICCPR because subsection 133E(1) would operate
to provide that a person cannot refuse to provide the information or
documents requested in a disclosure notice on the basis that doing so
would result in self-incrimination.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
2.41 However, existing subsection 133E(2) will operate to provide
that the information or documents cannot be used as evidence in criminal
proceedings except to the extent that the proceedings relate to compliance
with a disclosure notice or the provision of false or misleading
information in response to a disclosure notice as provided for in
subsection 133F and 133G.
Conclusion
2.42 Engaging the right against self-incrimination in this way is
necessary and justified as the public benefit in removing the liberty
outweighs the loss to the individual. It is not always possible or
appropriate for the ACCC to obtain this information from other parties
voluntarily, particularly where they may be subject to legal or confidential
restrictions. Being able to obtain this information in a timely manner
enables the regulator to complete safely investigations earlier and ensure
consumers are alerted sooner.
Schedule 7 - Power to obtain information, documents and evidence
Overview
2.43 Currently, the ACCC and ASIC are restricted in their ability to
investigate compliance and take enforcement action with respect to unfair
contract terms. This is because their investigative powers are triggered by
'contraventions' or 'possible contraventions' of the law.
2.44 As the use of unfair contract terms is not prohibited by the law it
is not possible to breach or contravene these provisions in the law.
2.45 Schedule 7 to the Bill extend ASIC and the ACCC's respective
investigative powers to enable those regulators to undertake investigations
to determine if a term in a contract may be unfair.
Human rights implications
2.46 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.47 This Schedule is compatible with human rights as it does not
raise any human rights issues.
24
Statement of Compatibility with Human Rights
Schedule 8 - Non-punitive orders
Overview
2.48 Regulators can already apply to the court for a community service
order as a remedy where a person has contravened, or has been involved in a
contravention of, the ACL.
2.49 Schedule 8 to this Bill amends section 246 to clarify that a court
may issue a community service order requiring the person to engage a third
party, at the person's expense, to perform the service required in the order.
2.50 A court may consider using this remedy when the person in
breach is not qualified or trusted to give effect to an order. For example, a
court may consider that it is not appropriate for a person who has caused
financial harm to low-income or vulnerable people to provide financial
counselling to those people.
Human rights implications
2.51 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.52 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 9 - Guarantees relating to the supply of services
Overview
2.53 The consumer guarantees regime sets out a number of statutory
guarantees that apply to all consumer transactions.
2.54 Section 63 of the ACL outlines services to which the guarantees
regime does not apply (exemptions). Paragraph 63(a) currently provides
that the consumer guarantees do not apply to services that are supplied
under 'a contract for or in relation to the transportation and storage of
goods for the purpose of a business, trade, profession or occupation
carried on or engaged in by the person for whom the goods are
transported'.
2.55 Schedule 9 to the Bill clarifies that this exemption only applies
to the extent that the goods being transported relate to a consignee's
business. It does not apply where the goods being transported are for the
consignee's personal use.
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Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018
Human rights implications
2.56 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.57 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 10 - Consumer protection
Overview
2.58 A number of provisions in the ACL setting out consumer
protections for financial services are mirrored in the ASIC Act.
2.59 Schedule 10 of the Bill amends section 12DC of the ASIC Act
to replace references to 'the sale or grant' or the 'possible sale or grant' of
a financial product that consists of, or includes, an interest in land with the
'supply or possible supply' of a financial product that consists of, or
includes, an interest in land.
2.60 The amendments are not intended to alter or amend the current
operation of that provision.
2.61 Schedule 10 of the Bill also amends the ASIC Act to clarify that
the consumer protections that apply in connection to a financial product
that consists of, or includes an interest in land also apply where the
representation occurred prior to the acquisition of the land.
2.62 For example, the consumer protections apply to the promotion
of a registered or unregistered managed investment scheme that will
invest in property, or where a person recommends an investment in real
property using a self-managed super fund structure where no fund is yet
established.
Human rights implications
2.63 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.64 This Schedule is compatible with human rights as it does not
raise any human rights issues.
26
Statement of Compatibility with Human Rights
Schedule 11 - Consumer protections in relation to financial products
Overview
2.65 Certain provisions in the ASIC Act are intended to mirror
certain provisions in the ACL, including the protections against
unconscionable conduct, misleading or deceptive conduct, and harassment
and coercion.
2.66 However, the existing provisions in the ASIC Act do not refer to
financial products as the definition of financial services is intended to
have a broad definition, which includes financial products.
2.67 Schedule 11 of the Bill amends the ASIC Act to clarify that the
consumer protections that already apply to financial services also apply to
financial products.
Human rights implications
2.68 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
2.69 This Schedule is compatible with human rights as it does not
raise any human rights issues.
27
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