Motor Trades Association of Australia SCOCA Australian Consumer Law Draft RIS Consultation Competition and Consumer Policy Division Treasury Langton Crescent PARKES ACT 2600 By email: australianconsumerlaw@treasury.gov.au Dear Sir/Madam Thank you for the opportunity to comment on the recently released draft Regulation Impact Statements (RISs) in relation to the Australian Consumer Law. In the brief time available to MTAA to consider the draft RISs, the Association has only been able to undertake limited consultation with its Members. That said however, MTAA offers the following comments on the matters raised in the draft RISs: General Consumer laws: 1. Unsolicited selling Whether there is a need for a national regulatory scheme for all forms of unsolicited offers and sales that occur in a non-retail environment, in person or via telephone, to be included in the ACL. Option A: Prohibit direct and telephone sales. Option B: Not include any specific provisions regulating direct and telephone sales and repeal the existing provisions of state and territory legislation. Option C: Create a harmonised framework for direct and telephone sales reflecting best practice in state and territory legislation. MTAA would favour Option C. This would allow for the development of what could amount to a code of conduct for unsolicited sales and related issues. There is a temptation to adopt Option A but it is considered very restrictive and interventionist. Having said that consumers and businesses should be protected from inappropriate conduct in relation to direct and telephone sales and business should know what it can and cannot do. Question 1.1 - MTAA has nothing further to add. Question 1.2 - No, it needs specific legislation. Motor Trades Association House, 39 Brisbane Avenue, Barton ACT 2600 PO Box 6273, Kingston, ACT 2604 Telephone: + 61 2 6273 4333. Facsimile: + 61 2 6273 2738. Email: mtaa@mtaa.com.au A.B.N. 66 008 643 561
- 2 - Question 1.3 MTAA cannot really answer this question until more is known about a harmonised approach, but MTAA would not wish to see an additional compliance burden for business. 2. Asserting a right to payment for unauthorised advertisements Whether there should be a prohibition on a person asserting a right to payment from another person for unauthorised advertisements. Option A: Retain the TPA provisions only. The TPA currently prohibits a person asserting a right to payment for unsolicited goods or services, and unauthorised directory entries, but does not regulate unauthorised advertisements. Option B: Retain the TPA provisions, and include a new provision that prohibits a person asserting a right to payment from another person for unauthorised advertisements. Option C: Retain the TPA provisions but include a new provision that prohibits a person asserting a right to payment from another person for unauthorised advertisements, and regulations detailing requirements for the making of a warning statement. MTAA would support Option C as it is an improvement on the current TPA provision. Question 2.1 Yes, MTAA would support a mirror amendment to the ASIC Act in respect of financial products and services. 3. Information standards Whether a specific regulation-making power relating to the provision of information in relation to both goods and services should form part of the ACL. Option A: Incorporate the TPA information standards power in the ACL, which applies to goods only. Option B: Include a general power in the ACL to prescribe information standards in relation to both goods and services. MTAA would support Option B. There is no reason why services should not be part of any information standards regime. Question 3.1 MTAA has no information on this issue. Question 3.2 MTAA believes that national uniformity would be seen by both businesses and consumers as a positive development. 4. Liability for unsolicited services Whether a person receiving a supply of unsolicited services should be liable for such services. Option A: Retain the TPA provisions only; which make a person not liable for a supply of unsolicited goods (other than in respect of wilful or unlawful acts). Option B: Retain the TPA provisions, and include provisions dealing with liability for unsolicited services.
- 3 - MTAA could support Option B. Question 4.1 - MTAA supports Option B. 5. Standards of disclosure Whether there should be minimum standards for documents required under the ACL. Option A: Not adopt standard of disclosure requirements in the ACL. Option B: Adopt, in principle, the Victorian requirements that documents specifically required under the ACL must be clear and legible. Option C: Adopt, in principle, the Victorian requirements that all consumer documents must be clear and legible. MTAA supports proper documentation being available to consumers, but would only extend that to the extent that the documents are required under the ACL; hence the Association could support Option B. As a matter of general principle any documents required by any legislation, be they targeted to consumers or business, should be subject to such standards. Question 5.1 - That it can be readily understood by persons in the environment where it would be given to the person; such as a shop or office. Question 5.2 - Only for documents specified in the ACL. Question 5.3 - Yes, the requirement should be mirrored in the ASIC Act. 6. Bills and receipts Whether requirements should be placed on a business to provide receipts or itemised bills in certain circumstances, in addition to existing legal requirements to do so. Option A: Remove the Victorian bills and receipts requirements, and rely on the requirements for tax invoices in the GST law. Option B: Adopt the Victorian requirements for bills and receipts in the ACL, and retain the requirements for tax invoices in the GST law. Option C: Adopt the Victorian requirements for bills in the ACL to cover only those transactions for goods and services not already covered by the GST law. MTAA does not see a need for the ACL to get into such micro issues and hence supports Option A and reliance on the GST requirements. Question 6.1 MTAA believes that the information requirements should be the same as the GST requirements.
- 4-7. Lay-by sales Whether there should be national regulation of the sale of goods where payment is made by instalments prior to the receipt of goods (lay-by sales). Option A: Not adopt specific lay-by sales regulation in the ACL. Option B: Adopt a harmonised model for lay-by sales regulation, based on existing state and territory provisions. MTAA would support Option B, but that said the Association is not convinced that the ACL should specify such detail but it may be that the issue of lay-by could be addressed in a code as part of the ACL or otherwise. However, as with unsolicited sales, the rules must be harmonised. 8. Dual pricing Whether a prohibition on suppliers selling at more than the lowest appended price where multiple prices are indicated for a good is needed. Option A: No specific regulation of dual pricing. Option B: Where more than one price is appended to goods, prohibit selling at higher than the lowest of the prices. MTAA would support Option B; dual pricing is to be discouraged and general misleading conduct provisions are not targeted enough. Question 8.1 MTAA believes so. Question 8.2 Not that MTAA is aware. 9. Offering gifts and prizes Whether the current prohibition on offering gifts and prizes without an intention to provide them, or to provide them as offered, should be augmented to require that gifts and prizes offered are provided within a reasonable time and as ordered. Option A: Retain the TPA provision only, which prohibits accepting payment without intending to provide the gifts or prizes as offered. Option B: Replace the intent-based TPA provision with a requirement to provide gifts and prizes, as offered, within a reasonable time. Option C: Add to the intent-based TPA provision to include a separate requirement to provide gifts and prizes, as offered, within a reasonable time. MTAA could support Option C, which preserves the current TPA provision but adds a provision that those businesses who are not acting in a fraudulent manner still have an obligation to supply in a reasonable period. Question 9.1 - Fraud, negligence or unforeseeable acts of others.
Question 9.2 It would likely result in a requirement for more detailed record keeping by those offering the gifts or prizes. - 5-10. Accepting payment without intent to supply Whether the current prohibition on accepting payment for goods or services without an intention to provide them, or to provide them as offered, should be augmented to require that goods or services are provided within a reasonable time after payment is accepted. Option A: Retain the TPA provision only, which prohibits accepting payment while not intending or being able to supply goods or services as offered. Option B: Replace the TPA provision with a requirement to supply within the specified time or, if no time is specified, within a reasonable time and a prohibition on supplying materially different goods or services. Option C: Retain the existing intention-based elements of the TPA provision and add a requirement to supply within the specified time or, if no time is specified, within a reasonable time and a prohibition on supplying materially different goods or services. MTAA would prefer Option C for the same reasons as set out in the previous proposal. Question 10.1 - It may be that such issues, not really being consumer issues, are excluded and dealt with differently in the ASIC Act. Question 10.2 - There might be circumstances where the reasons for non supply are unforeseen but refunds must then be mandatory. Question 10.3 MTAA is unable to comment on this issue. 11. False or misleading representations Whether the current prohibitions on false or misleading representations should be extended, including clarifying that the prohibition extends to all false or misleading representations of the types listed in section 53 of the TPA. Option A: Retain the TPA s existing types of prohibited false or misleading representations listed in section 53 of the TPA. Option B: Add to the TPA provision to include a separate prohibition on representations that purport to be a testimonial or that are about a testimonial, from being false or misleading (based on VIC FTA 14(1)). Option C: Option B, but with an evidentiary burden on the respondent. MTAA supports Option A, and notes that in relation to Option C, the evidentiary burden is already on the respondent. Question 11.1 MTAA does not see any reason why representations concerning testimonials should not be listed, but would observe that such behaviour should be covered by section 52. Question 11.2 MTAA agrees with this; assuming there is a specific prohibition. Question 11.3 - No, it is expected that it would cover all of section 53.
- 6 - Product Safety The specific non-framework recommendations contained in the Productivity Commission s 2006 Report that are the subject of the draft product safety RIS, are: Recommendation 7.1: Governments should amend consumer product safety provisions in all jurisdictions to cover services related to the supply, installation and maintenance of consumer products. Recommendations 6.1 and 8.1: The threshold test in all jurisdictions for bans and recalls should cover goods of a kind which, under normal or reasonably foreseeable conditions of use, will or may cause injury to any person. Recommendation 9.3: Governments should require suppliers to report to the appropriate regulator, products which have been associated with serious injury or death. Recommendation 11.2: Governments should have the power to undertake a recall directly where no supplier can be found to undertake such a recall. These recommendations involve amending existing legislation on product safety which will form the basis of the national consumer law. Accordingly, the draft RIS considers two possible options to these recommendations: introduce the recommendations by amending or augmenting the current product safety provisions in the TPA; or not introduce the recommendations and maintain the existing product safety provisions in the TPA. MTAA would not support the introduction of the above recommendations if it was a legal requirement that suppliers of motor vehicles (broadly defined) had to report products which have been associated with serious injury or death. MTAA would observe that in many instances where injury or death occurs relating to motor vehicles there may well be user or operator error involved and thus the safety of the product may not in fact be in question. There is already extensive reporting of motor vehicle accidents (through the police, road safety agencies and of course coroners reports). In principle, MTAA could support recommendations 7.1, 6.1, 8.1 and 11.2 above. Yours faithfully MICHAEL DELANEY Executive Director 27 November 2009