Consultation on Exposure Draft on Australian Consumer Law (ACL) Amendments

Consultation on Exposure Draft on Australian Consumer Law (ACL) Amendments

Consumer, Uncategorized

The Government recently released an exposure draft of a Bill (the draft Bill) capturing many of the recommendations of 2017’s Australian Consumer Law (ACL) Review (https://treasury.gov.au/consultation/t257313).

Today we look at the key proposals contained in the draft Bill and point out how where they differ from the recommendations that resulted from the review.

Australian Consumer Law
Photo by Luke Palmer on Unsplash
By Dr Drew Donnelly, Compliance Quarter.

Background

In mid-2015 the Commonwealth, State and Territory Consumer Affairs Ministers (Joint Ministers) asked Consumer Affairs Australia and New Zealand to initiate a broad-reaching review of the Australian Consumer Law (ACL), the ‘ACL Review’. As well as generally looking at whether the Australian Consumer Law was still fit-for-purpose, the Australian Consumer Law Review looked at where it would be appropriate to increase consistency between provisions in the ACL and the Australian Securities & Investments Commission (ASIC) Act 2001.

After extensive consultation, the Australian Consumer Law Review Final Report was released in April 2017, and in August 2018 Joint Ministers recommended legislating a range of proposals that came out of theAustralian Consumer Law Review (see http://consumerlaw.gov.au/communiques/meeting-9-2/). On the basis of those recommendations and other considerations, the Commonwealth Government developed the draft Bill.

The draft Bill

Amendments to the Australian Consumer Law in the draft Bill are set out below.

  • Evidentiary burden. Expanded ‘follow-on’ provisions will allow private individuals to rely on admitted facts from early court proceedings (such as proceedings brought by the Australian Competition and Consumer Commission (ACCC));
  • Unconscionable conduct. The prohibition on unconscionable conduct against a person is extended to include where that person is a publicly listed company;
  • Unsolicited consumer agreements. Section 69 of the Act will be altered to make it clear that an unsolicited consumer agreement can include situations where a dealer meets a consumer away from business premises (for example, in a public place).
  • Pre-selected options in online booking. Fees or charges associated with pre-selected options (e.g. carbon offsets when purchasing flights) must be included in the single price.
  • Product Recall. A definition for ‘recall’ is included in the Australian Consumer Law to specify when notification obligations are met.
  • Product safety information. The ACCC can request information about unsafe products from third parties, as well as the supplier.
  • Unfair contract terms. ACCC and ASIC will be able to investigate unfair contract terms.
  • Penalties and Remedies. Remedies extended to give the court the power to require the person in contravention of the ACL to engage a third party to perform the required community service.
  • Consumer Guarantees. The exemption from consumer guarantees for the transport or storage of goods is clarified so that it only applies where both the consignor and consignee are a business, not where the consignee is a consumer.
  • Financial products. Consumer protections are clarified to make it clear that they apply to financial products, not just financial services.
  • Technical amendments. Amendments are made to the definition of unsolicited services and the definition of ‘supply or possible supply’ of a financial product.

Notable omissions

The proposals in the draft Bill largely mirror the matters identified for immediate amendment by the Joint Ministers. However, there are a couple of areas where the Bill does not incorporate those recommendations. Specifically:

  • Warranties against defects. Joint Ministers recommended clarifying the requirements for warranties against defects by developing text relating specifically to services and services bundled with goods.
  • Maximum Penalties. Joint Ministers had recommended an increase to maximum financial penalties available under the ACL by aligning them with penalties relating to competition provisions of the Competition and Consumer Act 2010:

It is worth keeping in mind that the recommendations of Joint Ministers contained on this Bill were recommended on the basis that they would have a minor regulatory impact and did not need a full regulatory impact analysis. In light of this, it may be that the Commonwealth Government has decided that the proposals recommended by Joint Ministers, not contained in the bill (particularly with regards penalties) are in need of further consideration.

Consultation on the draft Bill ends on 28 February 2018. You may send your submissions to consumerlaw@treasury.gov.au.

Are you prepared for 1 April 2018? Five questions about the new registration requirements for the sale or supply of electricity in Victoria

Are you prepared for 1 April 2018? Five questions about the new registration requirements for the sale or supply of electricity in Victoria

AU Energy Compliance

The ESC announces registration and provision of key information in relation to the sale or supply of electricity in Victoria. We take a deeper look.

The Victorian State Government (the Government) recently announced that those who currently sell or supply electricity under an exemption in Victoria (such as those ‘on-selling’ in a private electricity (or ‘embedded’ network), will now be required to register and provide key information to the Essential Services Commission (ESC).[1]

The new registration requirement will apply from 1 April 2018.

In today’s article, we give you a quick run-down on the new requirements as well as proposals that the Government seeks feedback on.

supply of electricity
Photo by Jens Moser on Unsplash

Background

Late last year we discussed proposals that the majority of those with existing exemptions under the Australian Energy Regulator’s (AER’s) exemptions framework be required to hold authorisations (https://compliancequarter.com.au/taking-axe-embedded-network-exemptions/). Victoria operates its own licensing and exemption framework under the direction of the Essential Services Commission (ESC).

In its latest announcement, the Victorian Government announces similar changes for businesses serving Victorian customers.[2] The new framework requires ‘exempt persons’, which will cover most businesses that on-sell and/or supply electricity in an embedded network register with the ESC. The intention of these changes is to enhance consumer protections for electricity customers in Victoria.

Note that these requirements apply both to those who supply electricity, such as the operator of a private electricity (‘embedded’) network or those who sell it. Those businesses that engage in both will need to register under two categories (supply and sale).

  1. Who is covered?

As the new rules will apply to most existing exempt or ‘unlicensed’ providers, it is, perhaps, easier to specify which on-sellers or suppliers will not be required to register.

Registration will not be required or unlicensed providers if the sale or supply of electricity is to:

  • fewer than 10 small commercial/retail customers within the limits of site they own, occupy or operate (for example, a small shopping centre);
  • fewer than 10 residential customers within the limits of a site they own, occupy or operate (for example, a small block of apartments);
  • occupants of short-term holiday accommodation (but excluding caravan parks, holiday parks, residential land lease parks and manufactured home estates. Providers supplying or selling electricity to anyone in these types of sites are required to register);
  • to a related company;
  • on or within their premises to customers in conjunction with, or ancillary to, providing telecommunication services.
  1. What information will be required of providers for registration and published online?

The ESC will require providers to supply:

  • The name of the provider;
  • The type of activity the provider is engaged in;
  • The date from which the registration is in force;
  • Whether the registration is current.
  1. What information is ESC proposing to request of providers and publish online?

The ESC is proposing to require as part of registration (and seeks public feedback on):

  • the ABN/ACN of the provider;
  • the provider’s trading name;
  • the provider’s customer contact details;
  • the site name where the supplying or selling activity is taking place (where relevant, for example, the name of the apartment building, caravan park or shopping centre);
  • the site address where the activity is being carried out (where relevant).
  1. What information is the ESC proposing will be requested from providers but will remain unpublished?

The ESC also proposes (and seeks public feedback) on:

  • Information to ensure that the activity being undertaken does not require a licence;
  • The network owner’s name and contact details if different to the operator (e.g. the owners’ corporation);
  • The number of customers that are being supplied or sold electricity;
  • An estimate of the aggregate (total) yearly electricity consumption at the site in megawatt hours (MWh).
  1. Do I still need to meet the exemption or authorisation requirements of the AER?

Yes, under the National Electricity Law, if your business supplies or distributes energy your business is likely to be subject to AER’s network service provider authorisation and exemption framework. This is in addition to your obligations under ESC’s framework.[3]

Feedback on the proposals in this article (and other matters raised by the ESC) should be sent to the ESC via the exemptionregister@esc.vic.gov.au by 5.00 pm Monday 19 February 2018.

Get in contact with us here at Compliance Quarter if you think that we could be of any assistance in ensuring that your business meets ESC’s registration requirements.

[1] To read more go to https://www.esc.vic.gov.au/document/energy/56505-draft-decision-register-non-licensed-electricity-providers-registration-guideline-information-registration-public-register/.

[2] You can read more about the background to these changes here https://compliancequarter.com.au/embedded-network-operators-take-note-new-general-exemption-order-victoria/.

[3] To read more about this go to https://www.energy.vic.gov.au/__data/assets/pdf_file/0027/89307/Fact-sheet-electricity-embedded-networks-DELWP-template-20171113-PDF.docx.pdf.