EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 280

 

Subject Trade Practices Act 1974

 

Trade Practices (Australian Consumer Law) Amendment Regulations 2010 (No. 1)

 

Section 139G of the Trade Practices Act 1974 (contained in Schedule 2 to the Trade Practices Amendment (Australian Consumer Law Act (No. 2) 2010) provides that the Governor-General may make regulations prescribing matters required or permitted by the Australian Consumer Law (ACL) to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to that ACL.

 

Item 12 of Schedule 7 to the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (ACL Act) provides that the Governor-General may make regulations prescribing matters of a transitional, application or saving nature in relation to the amendments and repeals made by the Schedules to the ACL Act.

 

The ACL Act has received the Royal Assent and is scheduled to commence on 1 January 2011. Accordingly, these regulations are made pursuant to section 4 of the Acts Interpretation Act 1901, which has the effect that the regulation-making powers in the ACL Act can be exercised as if the Act had come into force.

 

The Trade Practices Act 1974 (the Act) and the Trade Practices Regulations 1974 (the Principal Regulations) provide for the regulation of competition, fair trading and consumer protection.

 

The ACL Act amends the Act to complete the initial text of the Australian Consumer Law (ACL) and to apply it as a law of the Commonwealth. The ACL is a single, national consumer law, which will apply as a law of the Commonwealth and of each of the States and Territories under an application of laws scheme.

 

The primary purposes of the ACL are to:

 

•                incorporate the fair trading and consumer protection provisions of the Act into the ACL, whilst adopting best practice from State and Territory fair trading laws;

•                create a national legislative scheme for statutory consumer guarantees;

•                create a national legislative scheme for consumer product safety;

•                create an infringement notice regime that will apply to specified provisions of the ACL; and

•                change the name of the Act to the Competition and Consumer Act 2010.

 

The Regulations amend the Principal Regulations to give practical effect to the ACL provisions dealing with:

 

•                prescribed requirements for asserting a right to payment;

•                agreements that are not unsolicited consumer agreements;

•                requirements for warranties against defects and repair notices; and

•                reporting requirements for goods or product-related services associated with death, serious injury or serious illness.

 

Details of the Regulations are set out in the Attachment.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations have various commencement dates. Regulations 1 to 3 and Schedule 1 to the Regulations, which relate to prescribed requirements for asserting a right to payment, agreements that are not unsolicited consumer agreements and reporting requirements for goods or product-related services associated with death, serious injury or serious illness, commence on 1 January 2011 to coincide with related provisions in the ACL Act.

 

Schedule 2 to the Regulations, which relates to repair notices, commence on 1 July 2011. Schedule 3 to the Regulations, which relates to warranties against defects, commence on 1 January 2012. The delayed commencement for Schedules 2 and 3 to the Regulations allow businesses time to adjust to the new requirements for repair notices and warranties against defects.

 

 

Authority: Section 139G of the Trade Practices Act 1974 (as set out in Schedule 2 to the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010)

 

Item 12 of Schedule 7 to the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010

 

ATTACHMENT

 

Details of the Trade Practices (Australian Consumer Law) Amendment Regulations 2010 (No. 1)

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the Trade Practices (Australian Consumer Law) Amendment Regulations 2010 (No. 1).

 

Regulation 2 – Commencement

 

This regulation provides that the regulations are to commence as follows:

 

•                on 1 January 2011 — regulations 1 to 3 and Schedule 1;

•                on 1 July 2011 — Schedule 2;

•                on 1 January 2012 — Schedule 3.

 

Regulation 3 – Amendment of Trade Practices Regulations 1974

 

This regulation provides that Schedules 1 to 3 amend the Trade Practices Regulations 1974 (the Principal Regulations).

 

Schedule 1– Amendments commencing on 1 January 2011

 

The commencement date of 1 January 2011 for the following amendments aligns with the commencement date for the ACL.

 

Item [1]

 

Schedule 5 to the ACL Act provides for a change to the title of the Act to the Competition and Consumer Act 2010 on 1 January 2011.

 

Item 1 changes the title of the Principal Regulations to the Competition and Consumer Regulations 2010, reflecting the change to the title of the Act.

Item [2]

 

Item 2 changes the definition of ‘Act’, reflecting the change to the title of the Act.

 

Items [3], [4] and [5]

 

Items 3, 4 and 5 inserts definitions of ‘approved form’, ‘Audit Bureau of Circulations’, ‘large proprietary company’ and ‘subsidiary’ for the purpose of clarification and regulation 4A, which is inserted by item [6], below.

 

Item [6]

 

Paragraph 79(c) of the ACL requires that an agreement or agreement document must be accompanied by a notice that may be used by the consumer to terminate the agreement and that complies with any requirements prescribed in the regulations.

 

Item 6 inserts a new regulation 4A that allows the Commonwealth Minister to approve a paragraph 79(c) notice for a purpose authorised or required by the Principal Regulations.

 

Item [7]

 

Item 7 renumbers existing regulation 4A in the Principal Regulations as regulation 4AA to accommodate new regulation 4A as inserted by item [6].

 

Item [8]

 

Item 8 inserts a new Part 6 – Australian Consumer Law consisting of new regulations 77 to 92 and a new Part 7 – Transitional matters – Australian Consumer Law consisting of new regulations 93 and 94.

 

Prescribed requirements for asserting a right to payment

 

Section 10 of the ACL provides for a presumption that a person asserts a right to payment, amongst other things, if they send an invoice or other document that seeks payment without complying with requirements prescribed in the regulations.

 

Subsections 40(3) and 43(2) of the ACL prohibit a person from sending an invoice or other document to others seeking payment for unsolicited goods, services or unauthorised entries or advertisements, without either having a reasonable cause to believe they have a right to be paid or complying with the requirements prescribed in the regulations.

 

New regulation 77 prescribes requirements for invoices that, if complied with, would allow a person to avoid the presumption, in section 10 of the ACL, that they have asserted a right to payment.

 

New regulation 78 provides recipients of requests for payment for unsolicited goods, services or unauthorised entries or advertisements with information that limits the scope for confusion on the part of the recipient of a document about whether they have an obligation to pay the provider of the document money in response to a purported assertion of a right to payment.

 

Regulations 77 and 78 require any requests for payment for unsolicited goods, services or unauthorised entries or advertisements to include the text ‘This is not a bill. You are not required to pay any money.’ This text also needs to be the most prominent text in the document.

 

Specification of the Audit Bureau of Circulations and other persons

 

Paragraph 43(3)(a) of the ACL provides an exemption from the provisions dealing with asserting a right to payment for entries or advertisements for the publisher of a publication with an audited circulation of 10,000 copies or more per week, as confirmed by the most recent audit of the publication by a body specified in the regulations.

 

Paragraph 43(3)(d) provides an exemption from the provisions dealing with asserting a right to payment for unauthorised entries and advertisements for a person specified in the regulations.

 

New regulation 79 specifies the Audit Bureau of Circulations as the relevant body for paragraph 43(3)(a) of the ACL.

 

New regulation 80 exempts large proprietary companies, listed corporations and their subsidiaries, provided they have not been found guilty of an offence under section 162 of the ACL, which prohibits asserting a right to payment for goods or services. The exemption is provided on the basis that such entities have strong reputational disincentives from engaging in conduct that would otherwise be covered by subsection 43(3) of the ACL.

 

Agreements that are not unsolicited consumer agreements

 

The ACL provisions dealing with unsolicited consumer agreements (Division 2, Part 3-2 of the ACL) introduce a number of disclosure requirements and termination rights that apply when a person sells goods or services to a consumer as a result of an unsolicited approach.

 

The regulations provide that some types of agreement are not unsolicited consumer agreements on the basis that, with reference to certain selling practices, compliance with all of the requirements of the ACL would impose disproportionate business compliance burdens having regard to the lower likelihood of consumer harm arising from those practices.

 

New regulation 81 provides that the following agreements are not unsolicited consumer agreements:

 

•                a business contract;

 

•                a discontinued negotiations agreement;

 

•                an agreement made in the course of a party plan event;

 

•                a renewable agreement of the same kind; and

 

•                a subsequent agreement of the same kind.

 

Business contract

 

Under section 3 of the ACL, a person is taken to be a ‘consumer’ if they acquire goods or service for a price of less than $40,000 or they acquire goods or services of a kind that are ordinarily acquired for personal, domestic or household use or consumption. Under section 69 of the ACL an ‘unsolicited consumer agreement’ is for the supply, in trade or commerce, of goods or services to a consumer. Accordingly, without further modification, the provisions would apply to all business transactions, to the extent that they acquire goods or services for a price of less than $40,000.

 

The definition of ‘consumer’ would have the effect of excluding some transactions entered into by businesses from the scope of the provisions. A person is not a consumer if they acquire goods, or hold themselves out as acquiring goods, for the purpose of re-supply or for the purpose of using them up or transforming them, in trade or commerce, in the course of a process of production or manufacture or in the course of repairing them or treating other goods or fixtures on land.

 

The regulation further limits the application of the unsolicited consumer agreement provisions to transactions entered into by businesses by limiting them only to goods or services ordinarily acquired for personal, household or domestic use or consumption of a value less than $40,000.

 

The regulation allows, for example, a bookshop to accept an unsolicited supply of cash-register docket paper, or a doctor to accept an unsolicited supply of medical equipment.

 

New sub-regulation 81(2) defines a ‘business contract’ as a contract for the supply of goods or services other than goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption.

 

Discontinued negotiations agreement

 

The unsolicited consumer agreement provisions deal with situations in which a consumer may otherwise succumb to unacceptable pressure selling tactics employed by a supplier. This risk is the greatest when a consumer is approached by a supplier and is not provided with sufficient time (in particular, time spent away from the influence of the seller) to consider whether to purchase the goods or services offered. The ACL deals with this risk by providing for a 10-day cooling off period, during which a consumer may choose to terminate the contract.

 

The risk that a consumer will enter into a contract under the influence of unacceptable pressure selling tactics may be reduced if the consumer discontinues contact with the supplier and subsequently chooses to contact the supplier to purchase goods or services. Accordingly, the regulation provides that an agreement is not an unsolicited consumer agreement if a consumer discontinues negotiations with a supplier but, subsequently, initiates negotiations with the same supplier. This break in negotiations allows a consumer time to consider whether they wish to initiate negotiations to purchase goods or services, and to seek out the supplier.

 

Sub-regulation 81(2) defines a ‘discontinued negotiations agreement’ as an agreement made when a consumer discontinues negotiations, but subsequently initiates negotiations with a supplier.

 

Party plan event

 

A ‘party plan’ is a method of supplying goods or services by demonstrating them to consumers at an event that takes the ostensible form of a social occasion involving, for example, family members, friends and acquaintances or work colleagues, which may occur in the home of a consumer, at a person’s place of work or at another place. A person who is invited to a party plan event generally attends in the expectation that they will be asked to purchase goods or services at the event. On this basis, all of the consumer protections that apply to unsolicited consumer agreements are not appropriate, given that the transaction is not unanticipated and is more akin to a retail transaction.

 

New sub-regulation 81(2) defines a ‘party plan event’ as:

 

•                an event for the purpose of negotiating the supply of goods and/or services to one or more persons; and

 

•                before the event, a person (the ‘inviter’) invites three or more other persons to the event; and

 

•                during the event, the inviter and those invited are in the same premises as the inviter or the inviter’s representative.

 

New sub-regulation 81(2) also defines ‘inviter’ as a person who invites another person to a party plan event.

 

New sub-regulation 81(2) also defines ‘invitation’ to mean an express or implied statement that the persons invited to the party plan event are invited to the event for the purpose of negotiating for the supply of goods or services to one or more persons. If a statement is implied, a reasonable consumer must be able to understand that the invitation is for the purpose of supplying goods or services.

 

An invitation to a party plan event may be either oral or written. The requirement that the invitation to a party plan event indicates that the purpose of the event is for the supply of goods and/or services, is to ensure that a consumer is not surprised to find that the purpose is for the supply of goods and/or services. The requirement for an invitation also prevents impromptu gatherings of three or more persons being capable of attracting the party plan exemption.

 

Renewable agreement of the same kind

 

Consumers sometimes acquire goods or services that are required on an ongoing basis under contracts that expire periodically. Common examples are those for telecommunication services, supplies of electricity and gas, membership of a club and membership of a road service organisation. The suppliers of these goods and services sometimes contact consumers to ask if they would like to renew their contract. Consumers may find that this is convenient, as otherwise contracts for essential services may lapse and they may be without those services for a period of time until a contract can be renewed or an alternative supplier is found.

 

The same protections that apply to unsolicited consumer agreements are not appropriate in these circumstances, as a consumer will have had an opportunity to use the goods or services, usually for a considerable period of time.

 

New sub-regulation 81(2) defines a ‘renewable agreement of the same kind’ so that an agreement must be in force between a consumer and a supplier and the consumer enters into another agreement for supply of goods or services that are of the same kind as those supplied under the existing contract.

 

Subsequent agreement of the same kind

 

Consumers who purchase the same or very similar goods from a dealer or supplier at regular intervals, are aware of the products and have an ongoing relationship with the dealer or supplier. In such circumstances, the requirement to provide the full range of information and other rights in relation to each transaction may not be appropriate.

 

New sub-regulation 81(2) defines a ‘subsequent agreement of the same kind’ so that goods or services must be supplied under an agreement between a consumer and a supplier and within three months of the supply of goods or services the consumer and supplier enter into one or more other agreements for supply of goods or services that are of the same kind as those supplied under the existing contract. For the exemption to apply, the total cumulative value of the other agreements needs to be $500 or less.

 

Information relating to the identity of a dealer

 

Subsection 74(c) of the ACL provides that a dealer who calls on a person for the purpose of negotiating an unsolicited consumer agreement must provide prescribed information regarding their identity.

 

New regulation 82 requires a dealer to provide their name and address. A dealer may provide a post office box, business or workplace address. If the dealer is not the supplier of the goods or services, the dealer must provide the supplier’s name and address (not being a post office box). A supplier is not permitted to use a post office box address, to ensure that a consumer, or a consumer law enforcement agency, is able to readily contact a supplier in the event that a problem arises with goods or services supplied under an unsolicited consumer agreement.

 

Information about termination period

 

Subparagraph 76(a)(iii) of the ACL provides for consumers being provided with prescribed information before an unsolicited consumer agreement is made.

 

New regulation 83 provides that a consumer must be provided with information about the 10 day cooling off period prohibition provided for by section 86 of the ACL. Regulation 83 does not prescribe the exact words that must be used, to provide businesses with flexibility about the way in which they comply.

 

Section 86 of the ACL prohibits a supplier from supplying goods or services under an unsolicited consumer agreement or from accepting or requiring payment or any other consideration for a period of 10 business days from the time that the consumer receives the relevant agreement or agreement document.

 

Form and way of giving information about termination period

 

Subsection 76(d) of the ACL provides for regulations being made about the form and way in which information about termination periods is given to consumers about unsolicited consumer agreements.

 

New regulation 84 provides that the information must be attached to the agreement or agreement document; transparent, that is, it is expressed in reasonably plain language, legible and presented clearly; and in text that is the most prominent text in the document other than the text setting out the dealer’s or supplier’s name or logo. Regulation 84 does not prescribe the exact words that must be used, to provide businesses with flexibility about the way in which they comply.

 

Information for the front page of agreements and agreement documents

 

Subparagraphs 79(b)(ii) and 79(b)(iii) of the ACL provide for certain information and requirements being prescribed for the front page of unsolicited consumer agreements. The matters prescribed are limited to essential information that consumers need, to ensure that businesses have flexibility in the way in which they comply with the ACL. This ensures that businesses are not subjected to disproportionate compliance requirements.

 

New regulation 85 provides that the front page of an agreement must include the text:

 

•                ‘Important Notice to the Consumer’;

 

•                ‘You have a right to cancel this agreement within 10 business days from and including the day after you signed or received this agreement’; and

 

•                ‘Details about your additional rights to cancel this agreement are set out in the information attached to this agreement’.

 

New regulation 86 provides that the front page of an agreement must:

 

•                be signed and dated by the consumer; and

 

•                include the day on which the consumer signed the document.

 

Approved form for the agreement or agreement document

 

Section 79(c) of the ACL provides that an unsolicited consumer agreement must be accompanied by a notice that may be used to terminate the agreement. The notice must comply with requirements that are specified in the regulations.

 

New regulation 87 provides for the Commonwealth Minister approving a form that can be used by consumers to terminate an unsolicited consumer agreement.

 

Application of the ACL unsolicited consumer agreements provisions to an emergency repair contract

 

Paragraph 94(a) of the ACL contains a broad regulation making power to exempt certain kinds of circumstances from the scope of the unsolicited selling regime or certain provisions of the regime. This regulation making power does not apply to the permitted calling hours provisions (section 73 of the ACL).

 

To allow suppliers to approach consumers on an unsolicited basis to offer to supply goods or services on an urgent basis after a natural disaster, such as repairs to roofing after a cyclone, new regulation 88 allows for the provision of goods or services without a 10 business day cooling-off period or a prohibition on supply and payment for 10 business days.

 

Regulation 88 is limited to emergency repairs to a person’s property damaged by an earthquake, fire, flood, storm or similar event for which a state of emergency has been declared and limited to the area that such a declaration covers.

 

For the exemption to apply, the urgent work needs to be undertaken to rectify a property hazard, protect people’s health and safety, or prevent substantial property damage. The supplier under the emergency repair contract also needs to hold a licence that is in force in the relevant jurisdiction.

 

Application of the ACL unsolicited consumer agreements provisions to a contract for the supply of electricity or gas

 

Paragraph 94(b) of the ACL contains a regulation making power to exempt certain kinds of agreements from the scope of the unsolicited selling regime or certain provisions of the regime. This regulation making power does not apply to the permitted calling hours provisions (section 73 of the ACL).

 

Section 86 of the ACL provides that a supplier who has entered into an unsolicited consumer agreement must not supply goods or services, or accept or require any payment for those goods or services, for 10 business days.

 

To ensure that circumstances do not exist in which consumers would need to either initiate contact with an energy supplier or wait 10 business days before being supplied with energy, new regulation 89 allows the supply of electricity or gas to premises where these supplies are not connected or, where they are connected, no electricity or gas is being supplied.

 

Laws specified for supplier reports about consumer goods associated with death, serious injury or illness – regulation 92

 

Sections 131 and 132 of the ACL require suppliers of goods to give the Commonwealth Minister written notice within 2 business days of becoming aware that the use, or foreseeable misuse, of goods that they have supplied have caused death, serious injury or serious illness of any person.

 

Subsections 131(2)(c) and 132(2)(c) provide that the requirement to report death, serious injury or serious illness does not apply if the supplier, or another person, is required to notify the death, serious injury or serious illness under a law of the Commonwealth, a State or a Territory that is a law specified in the regulations.

 

New regulation 92 specifies laws of the Commonwealth and the States and Territories that include requirements to report death, serious injury or serious illness. This ensures that duplication of reporting requirements is avoided, when another law includes a similar reporting requirement. The following laws are specified:

 

•                the Agricultural and Veterinary Chemicals Act 1994 (Cth) – this Act applies the Code set out in the Agricultural and Veterinary Chemicals Code Act 1994 (the Code) as a law of the participating Territories. The Code requires certain persons to report matters related to agricultural and veterinary chemicals to the Australian Pesticides and Veterinary Medicines Authority (APVMA). To the extent that a matter must be reported to APVMA, a person is not required to also report that matter to the Minister under sections 131 or 132 of the ACL.

 

•                the National Health Security Act 2007 (Cth), the Public Health Act 1991 (NSW), the Public Health and Wellbeing Act 2008 (Vic), the Public Health Act 2005 (Qld), Health Act 1911 (WA), the Public Health Act 1997 (Tas) and the Notifiable Disease Act (NT), the Public and Environmental Health Act 1987 (SA) and the Public Health Act 1997 (ACT) – these Acts require certain persons to notify health authorities of notifiable diseases. To the extent that a notifiable disease is food-borne, or otherwise the cause of death, serious injury or serious illness, a supplier is not required to report the notifiable disease to the Minister under sections 131 or 132 of the ACL.

 

•                the Therapeutic Goods Act 1989 (Cth) – this Act requires certain matters related to therapeutic goods to be reported to the Secretary to the Commonwealth Department of Health and Ageing. To the extent that a report is required to the Secretary to the Department of Health and Ageing, the same matter is not reportable under sections 131 or 132 of the ACL.

 

•                the Coroners Acts of each State and Territory – these Acts require reportable deaths to be notified to the relevant State or Territory Coroner. To the extent that a death must be notified to a Coroner, a death is not reportable under sections 131 or 132 of the ACL.

 

•                the Road Transport (Safety and Traffic Management) Act 1999 (NSW), the Road Safety Act 1986 (Vic), the Motor Accident Insurance Act 1984 (Qld), the Transport Operations (Road Use Management – Road Rules) Regulation 2009 (Qld), the Road Traffic Act 1974 (WA), the Road Traffic Act 1961 (SA), the Traffic Act 1925 (Tas), the Road Transport (Safety and Traffic Management) Act 1999 (ACT) and the Traffic Act (NT) – these Acts require that persons involved in certain accidents on public roads report those accidents to relevant authorities. To the extent that an accident involving death, serious injury or serious illness must be reported to the relevant authorities under the specified laws, there is no requirement to also report that accident to the Minister under section 131 or 132.

 

•                the Food Regulations 2009 (WA) – these Regulations require proprietors of food businesses to notify certain pathogens identified in persons. These pathogens are also a likely cause of serious illness or death. To the extent that notification is required under the Regulations, a death or serious illness is not also reportable under sections 131 or 132 of the ACL.

 

Saving State or Territory laws for compliance with regulation 82 and regulations 83 to 87 – 1 January 2011 to 30 June 2011

 

Regulation 82 prescribes information related to the identity of dealers involved in negotiating unsolicited consumer agreements. Regulations 83 to 87 provide for information about termination periods and a termination notice to be provided to consumers, and also require an agreement to be signed and dated by a consumer.

 

Current State and Territory laws dealing with unsolicited selling also provide for persons being required to provide information related to their identity. Those laws also include requirements similar to those that are prescribed by regulations 83 to 87.

 

New regulation 93 is a transitional provision that allows persons involved in unsolicited selling to continue to comply with pre-existing laws until 30 June 2011. This allows businesses time to adjust to the new requirements that apply under regulations 82 to 87. At any time from 1 January 2011 to 30 June 2011, businesses may comply with either existing State and Territory laws dealing with these matters (which are saved for this purpose by these Regulations) or with regulations 82 to 87. This ensures that businesses can achieve a smooth transition from the existing to the new law, as they can adopt the new requirements at a time of their choosing, until 30 June 2011.

 

New sub-regulation 93(1) provides that regulation 93 is made for item 12 of Schedule 7 to the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 and applies from 1 January 2011 to 30 June 2011.

 

New sub-regulation 93(2) specifies the laws of each State and Territory (which are saved for this purpose by these Regulations) that a business may comply with until 30 June 2011.

 

New sub-regulation 93(3) specifies laws of each State and Territory that businesses may comply with until 30 June 2011.

 

Application of section 86 of Australian Consumer Law – 1 January 2011 to 31 December 2011

 

The States and Territories currently prohibit payment for, and supply of, goods and services during a cooling-off period in circumstances that differ significantly between jurisdictions. New South Wales (NSW), Victoria and the Australian Capital Territory (ACT) currently prohibit only the receipt of payment for services (but not goods) during the cooling-off period. Queensland, Tasmania, South Australia, Western Australia and the Northern Territory prohibit the receipt of payment for both goods and services during the cooling-off period. The NSW, Victorian and ACT prohibitions apply to both agreements negotiated face‑to‑face and over the telephone. The provisions in the other States and the Northern Territory apply only to agreements negotiated face-to-face.

 

Section 86 of the ACL creates a single prohibition on supply and payment for goods and services for 10 business days that will apply throughout Australia. Businesses, particularly those in NSW, Victoria and the ACT, that are not currently subject to a prohibition on supply or payment for goods during the cooling-off period, require time to adjust to the new national law. Accordingly, the regulations allow businesses to comply with the existing prohibition in a State or Territory, rather than complying with section 86 from the commencement of the ACL, on 1 January 2011, until 31 December 2011.

 

Whilst the pre-existing laws in NSW, Victoria and the ACT deal with agreements negotiated over the telephone, the laws in other States do not include any prohibition on supply or payment for agreements negotiated over the telephone. Accordingly, there is no pre-existing law that can be complied with in those jurisdictions for agreements negotiated over the telephone. In Queensland, Tasmania, South Australia, Western Australia and the Northern Territory section 86 applies to unsolicited consumer agreements negotiated over the telephone from 1 January 2011.

 

To assist businesses with the transition from existing State and Territory laws to the ACL, a business may comply with either the relevant pre-existing State or Territory law or comply with section 86 of the ACL until 31 December 2011 (other than in relation to telemarketing in Queensland, Tasmania, South Australia, Western Australia and the Northern Territory, where section 86 applies from 1 January 2011).

 

New sub-regulation 94(1) provides that regulation 94 is made for item 12 of Schedule 7 to the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 and applies from 1 January 2011 to 31 December 2011.

 

New sub-regulation 94(2) provides that sections 86, 179 and 76(a)(iii) do not apply to a dealer or supplier in a State or Territory if the dealer or supplier deals with or supplies goods or services in a State or Territory and complies with the relevant State or Territory law for the dealer or supplier.

 

Sections 86 and 179 of the ACL prohibit supply and payment for goods and services for 10 business days. Sub-paragraph 76(a)(iii) of the ACL provides for consumers being provided with information about section 86 of the ACL, which will not be relevant if a supplier or dealer is not required to comply with that section.

 

New sub-regulation 94(3) provides the relevant State or Territory laws for the purposes of sub-regulation 94(2). The laws listed are those that prohibit either or both of supply and payment for goods and services during the cooling-off period that applied in a particular State or Territory prior to the commencement of the ACL.

 

Further consideration may be given to the potential application of exemptions to section 86 of the ACL during the transition period.

 

Schedule 2 – Amendments commencing on 1 July 2011

 

Item [1]

 

Subsection 103(1) of the ACL provides for prescribed notices being given to consumers relating to the repair of consumer goods.

 

Item 1 inserts a new regulation 91 prescribing two such notices.

 

New regulation 91 prescribes a notice that must be given to consumers before goods are accepted for repair if those goods are capable of retaining user generated data, which is defined to mean any data stored on goods. The notice is required to state that the repair of the goods may result in the loss of data.

 

Regulation 91 also prescribes a notice that must be given to consumers in relation to repairing a consumer’s defective goods if it is the repairer’s practice:

 

•                to provide refurbished goods as an alternative to repair; or

 

•                to use refurbished parts in the repair.

 

The notice is required to include the words ‘Goods presented for repair may be replaced by refurbished goods of the same type rather than being repaired. Refurbished parts may be used to repair the goods.’

 

The commencement date of 1 July 2011 allows time for businesses to adapt their business practices to comply with Regulation 91.

 

Schedule 3– Amendments commencing on 1 January 2012

 

Item [1]

 

Requirements for warranties against defects

 

Section 102(1) of the ACL provides for the regulations prescribing the form and content of warranties against defects.

 

Suppliers and manufacturers often provide promises to consumers that goods or services will be free from defects for a certain period of time. Consumers may experience difficulties seeking to have suppliers or manufacturers fulfil such promises if they lack access to basic details, such as the name and address of the supplier.

 

To give businesses time to adjust to the new requirement, the prescribed requirements for warranties against defects do not commence until 1 January 2012.

 

Item 1 inserts new regulation 90 that prescribes certain requirements for warranties against defects. These requirements are similar to those that currently apply under Division 5, Part 3 of the Fair Trading Act 1989 (Qld). The requirements are that a warranty against defects:

 

•                is in a document that is transparent – this is, it is expressed in reasonably plain language, legible and presented clearly;

 

•                concisely states what the person who gives the warranty must do so the warranty may be honoured – for example, the supplier will repair the goods, or replace the goods within a certain time period;

 

•                concisely states what the consumer must do to entitle the consumer to claim the warranty – for example, contact the supplier or manufacturer and point to the defect;

 

•                includes the statement prescribed in sub-regulation 90(2) regarding consumer guarantees;

 

•                prominently states the name, business address, telephone number and email address (if any) of the person who gives the warranty;

 

•                must state the period of the warranty;

 

•                sets out the procedure for the consumer to claim the warranty, including the address to which claims may be sent;

 

 

•                must state who will bear the expense of claiming the warranty; and

 

•                must state that the benefits are in addition to other rights and remedies available to the consumer.