NSW Bill to Allow Fair Trading Commissioner to Directly Address Consumer Disputes

Monday 13 August 2018 @ 1.21 p.m. | Legal Research | Trade & Commerce

The NSW Government has introduced the Fair Trading Legislation Amendment (Consumer Guarantee Directions) Bill 2018 (NSW) (‘the Bill’) on 8 August 2018. The Bill proposes to allow the NSW Fair Trading Commissioner to address consumer issues directly, allowing the Commissioner to direct businesses to refund, replace or repair defective goods. The new laws are proposed to come into effect from 1 January 2019.

Proposed Amendments

This Bill proposes to amend the Fair Trading Act 1987 (NSW) to:

  • Insert a new schedule to provide that a consumer may apply to the Secretary (the NSW Commissioner for Fair Trading or if there is no person employed at the time as the Commissioner, the Secretary of the Department of Finance, Services and Innovation) for a consumer guarantee direction in relation to the sale of a consumer good;
  • Insert provisions relating to the definition of consumer goods for the purposes of the Act;
  • Insert provisions stating that the Secretary may resolve a dispute by directing a supplier to repair, replace or provide a refund for a good;
  • Insert provisions that set out the circumstances in which an application for a consumer guarantee direction is rejected, provisions relating to the making of consumer guarantee directions and provisions relating to the amendment of consumer guarantee directions.

The Bill also proposes to amend the Fair Trading Act 1987 (NSW), the Plumbing and Drainage Act 2011 (NSW), the Plumbing and Drainage Regulation 2017 (NSW) and the Property, Stock and Business Agents Act 2002 (NSW) to make various amendments relating to compliance and enforcement of consumer guarantee directions.

Information on the Operation of the Laws

In his second reading speech, Mr Matt Kean, the Minister for Innovation and Better Regulation, stated:

‘This bill is about "right touch" regulation, offering a fair, quick and cheap resolution option for small-value disputes where a direction is issued, as an alternative to the courts and tribunals. This new power is an important enhancement to NSW Fair Trading's existing complaints and dispute resolution service, and is designed to increase the number of successful outcomes reached by Fair Trading. Having said that, the preference of the Government is that consumers and businesses resolve their disputes as quickly and as painlessly as possible, ideally without Fair Trading's intervention.’

He provided an overview of the consumer guarantee direction process:

‘The commissioner will only use the directions power where satisfied that Fair Trading's complaints resolution procedures have failed to reach a mutually agreed outcome. The commissioner will then act as a fair, impartial umpire over the dispute, issuing a direction with a fair and reasonable outcome that lets the parties know where they stand. The commissioner will determine either that the business should repair, replace or refund the goods, or that no direction should be made. This will provide a simple, low-cost and timely resolution for those disputes that are progressed through the full directions process in a way that is proportionate to the problem.’

In a media release, NSW Fair Trading stated that the power will be run as a pilot program and internal evaluations will be conducted after 12 months. It stated:

‘The reform is aimed at enhancing Fair Trading’s existing complaints handling process. When used, the direction will mean Fair Trading can provide consumers and businesses with a fair, quick and cheap resolution to their dispute, outside of courts or tribunals.’

Media Response

Sarah Agar, the head of campaigns and policy at consumer advocacy group Choice , told The Sydney Morning Herald they were supportive of the proposed laws, stating that the tribunal process was intimidating and stressful for consumers when businesses did not cooperate with consumers.

She told the Sydney Morning Herald:

‘The new process with fair trading should be a lot faster, easier and cost-effective, and we really look forward to seeing it rolled out. We really hope that the regulators in other states and territories take note, because we would love to see similar schemes rolled out across the country so that all consumers can access quick and fair remedies.’

Ms Agar also said that she thought the proposed laws could encourage businesses to work together with consumers to arrive at a solution:

‘I think if businesses are aware that these matters can be brought to fair trading, and be resolved that way, it would be in their interests to work harder at the mediation stage and try to proactively provide consumers with remedies when they're entitled to them under the law.’

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