James Paterson (Victoria, Liberal Party) Share this | Hansard source

I'm delighted to rise to assist the Senate in its careful consideration of the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. I was listening carefully to the contribution made earlier by Senator Cameron. He said that this bill was so uncontroversial as to almost make it boring. I have two observations to share about that. Firstly, I would say that, clearly, Senator Cameron is his own harshest critic, because I didn't find his contribution to be boring at all. In fact, I thought it was a very good contribution. I would encourage him to be less harsh on himself in the future. Secondly, I say to Senator Cameron: challenge accepted. I hope in my contribution to this debate I'm able to maintain his and other senators' interest in this important piece of legislation.

One thing which I thought might be helpful in the consideration of this bill is to go through the key schedules in the bill. Schedule 1 is the admissions of fact, which relates to proposal No. 17 in the ACL review. This measure amends the Australian Consumer Law to ease evidentiary requirements for litigants through expanded follow-on provisions, enabling litigants to rely on admitted facts from earlier proceedings. This change addresses some of the difficulties that consumers and small businesses face when taking court action against traders under the Australian Consumer Law after the ACCC has already established a breach of law through the courts. Currently, what happens is that findings of fact made by a court in certain proceedings against a person may be used in certain other proceedings against that person under the ACL. This measure extends these existing follow-on provisions so that private litigants will now also be able to rely on admissions of fact made by the respondent in earlier proceedings as well as findings of fact.

An admission of fact brought across using this mechanism is not treated as conclusive proof in the new proceedings. It is prima facie evidence, which means that the respondent still has the opportunity to present evidence to rebut it. The measure will give consumers a better chance at successfully pursuing their rights against traders in court. The change will promote consistency with similar follow-on provisions in the competition law.

Turning now to schedule 2 of the bill, it's the listed public companies section of the bill, which relates to proposal No. 9 from the ACL review. The measure extends the unconscionable conduct provisions in the ACL and in the Australian Securities and Investments Commission Act 2001 to include publicly listed companies. The existing exclusion of publicly listed companies sought to confine the unconscionable conduct protections to those traders likely to lack the size and bargaining power to protect their interests. Public listing was seen as a reasonable indicator of a trader's size and ability to protect its own interests. However, public listing is not necessarily a reflection of a trader's size, level of resourcing or its ability to withstand unconscionable conduct. Where there is a significant imbalance in bargaining power, a publicly listed company could find itself subjected to conduct that is unconscionable. The unconscionable conduct provisions already protect some privately operated companies that may be, in fact, larger or better resourced than some publicly listed companies. Whether conduct is considered unconscionable will continue to be influenced by the relationship between the parties and the complainant's ability to protect their interests. The amendments improve both the clarity and the generic application of the unconscionable conduct protections by ensuring that they apply equally to all traders and support the ACL's objective of fostering effective competition and fair trading.

Schedule 3 of the bill is the unsolicited supplies part of the bill. This relates to the technical amendment A as proposed in the ACL review. This measure is a technical amendment to ensure a trader cannot demand payment for an unsolicited service that a consumer never asked for and never received. The ACL prohibits a trader from demanding payment for a service that the consumer never asked for. This is known as the false billing provision. However, the current interpretation of the false billing provision has made it difficult to enforce against suppliers of unrequested and unsupplied services, even where the supplier has falsely claimed they did actually supply the service. This measure helps to directly remedy this issue. For example, this has been a problem in the context of internet domain name services. Notices have been issued by resellers of registered domain names to traders with registered domain names asking for payment of a fee for renewal of that domain name when, in fact, it was for a variation on that domain name.

Schedule 4 of the bill relates to the unsolicited consumer agreements. That's relevant to proposal 12 in the ACL review. The ACL gives consumers certain rights when they enter an unsolicited consumer agreement. A typical example of this is door-to-door selling. This measure clarifies that those rights also apply where such an agreement is made in a public place. An unsolicited consumer agreement is an agreement which is the result of negotiations between a consumer and a dealer at a place other than the supplier's place of business. Certain other conditions need to be met, including that the consumer did not invite the dealer to come to that place. This is important because a consumer who enters an unsolicited consumer agreement gets certain rights, including a cooling off period of 10 business days, within which they can cancel their agreement. The original intention behind the unsolicited consumer agreement provisions was that public places would be covered. Nevertheless, there still has been some confusion about whether this is the case. This measure will stop that confusion. A consumer can be just as vulnerable in a public place as they are in their home or their workplace. They face the same risk of being subjected to high-pressure sales tactics and the transaction can be just as unexpected.

I now turn to schedule 5, the pricing schedule, which is proposal No. 13 from the ACL review. This measure amends the ACL to enhance price transparency by requiring that any additional fees or charges associated with preselected options are included in the headline price. This ensures that consumers are made aware from the start of the online payment process of the total possible amount they would pay if they do not opt out of the preselected options. Especially online, many traders preselect options attached to a consumer's purchase and it is up to the consumer to then deselect them before the end of the transaction if they do not want to take up these options. This has the potential to mislead consumers when they are unaware of the preselected options and do not have an adequate opportunity to opt out before proceeding to the payment. However, preselected options can be a legitimate business practice when they are not presented in a misleading manner, and this measure does not propose to interfere with that. For example, some businesses specifically offer and advertise bundled goods or services that include preselected options for the buyer's convenience. What this measure does is ensure that prices are transparent so that consumers are not tricked or surprised by hidden charges where traders preselect options on a transaction.

The next schedule, schedule 6, which is the disclosure notices relating to the safety of goods and services, relates to proposal 8 from the ACL review. This measure amends the ACL to strengthen the Australian Competition and Consumer Commission's powers to obtain product safety information by broadening the power to apply to any person, including consumers, likely to have relevant information, rather than only to the supplier. Currently, 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. However, these notices can only be issued to suppliers. Under current arrangements, the ACCC can only receive this information from third parties voluntarily. This may not always be possible or, indeed, appropriate, particularly where the third party may be subject to legal or confidentiality restrictions.

This measure broadens this power so that the minister or inspector may give disclosure notice to a third party if the minister or inspector has reason to believe that the third party is capable of giving information, producing documents or giving evidence in relation to the safety of the consumer good or product related service in question. The kinds of third parties from which the minister or inspector might require information include other traders; test laboratories; safety consultants; consumers who have purchased or have been injured by a hazardous product; or another person injured by a hazardous product. This amendment will help regulators respond to product safety issues in a more timely manner. It will also promote consistency with existing information-gathering powers for other ACL provisions.

Schedule 7 is the power to obtain information documents and evidence section, and it relates to proposal 11 from the ACL review. This measure amends the ACL and the ASIC Act to enable regulators to use their existing investigative powers to better assess whether or not a contract term is unfair. This will give the ACCC and ASIC the power they need to address the repeated or widespread use of unfair contract terms. 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. While the ACL provides a mechanism to void unfair contract terms in standard formal contracts, their use is not prohibited by the law. Therefore there are no contraventions or possible contraventions in relation to unfair contract terms.

Schedule 8 of the bill is the non-punitive orders schedule, and this relates to proposal 19 in the ACL review. This measure clarifies that a court may issue a community service order requiring a person in breach of the ACL to engage a third party at that person's expense to perform the service required in the order. A court may consider using the option when the person is in breach, is not qualified or trusted to carry out the community service itself. For example, a court could use this arrangement where a trader's conduct shows blatant disregard for the law, a trader has a history of mistreating consumers or it is evident that a trader clearly does not understand their legal obligations. An example of the type of community service order that might be made is the provision of financial counselling to consumers. Where a trader has used financial harm to low-income or vulnerable consumers, it may not be appropriate for that trader to provide such counselling. But it may be a very good outcome for the trader to engage a third party to provide the counselling. This is the kind of arrangement that this measure facilitates. This amendment will allow regulators to seek community services orders as a remedy to a breach in more circumstances because they no longer will have to rely on that trader to carry out the order but instead can now rely on a qualified third party.

Schedule 9 of the bill guarantees the supply of services, and this relates to proposal 5 in the ACL review. This measure amends the ACL to clarify the scope of an existing exemption from the consumer guarantees regime for the transport or storage of goods where those goods are damaged or lost in transit. The measure clarifies that the exemption only applies where both the consigner and the consignee are a business. The rationale behind the exemption is that, if the buyer or intended recipient of the good being transported or stored is a business, an exemption for the shipper or transporter is appropriate because the commercial buyer should have insurance or other contractual protections. This rationale does not generally hold true when the recipient is a consumer. This measure will ensure that consumers do not bear the full risk in circumstances where they have no control over the shipper or transporter. It will also ensure that consumers are clearly able to seek remedy directly from the shipper rather than relying on traders to raise issues with the shipper.

Schedule 10 is the consumer protection schedule of the bill, and relates to technical amendment B in the ACL review. The ASIC Act contains consumer protections for financial services which mirror a number of provisions in the ACL. These mirror provisions largely use imported language from the ACL. This means that, at times, the language is inconsistent with that used more generally in the ASIC Act, and may also unintentionally limit the application of certain provisions. This measure is a technical amendment to correct inconsistent terminology in the ASIC Act for financial products that involve interests in land that could unintentionally limit their application.

Schedule 11 of the bill is the consumer protections schedule in relation to financial products, and relates to proposal 16 in the ACL review. Senators will be pleased to know that it's the final schedule. This measure amends the ASIC Act to clarify that consumer protections that already apply to financial services also apply to financial products. This measure is designed to address a source of unnecessary uncertainty. The current provisions explicitly cover financial services and indirectly apply to conduct related to financial products. This is because 'financial services' has a broad definition. However, the absence of an express reference to financial products creates uncertainty. Explicitly covering financial products is also consistent with ASIC's existing approach to compliance and enforcement.

I'd like to take the opportunity to thank the opposition for their indication that they will be supporting these important measures in this bill, and to also thank Senator Patrick, who spoke on behalf of Centre Alliance, for indicating his support for the bill. I commend the bill to the Senate.