NSW Releases Public Consultation Draft of the Fair Trading Regulation 2019

Tuesday 9 July 2019 @ 10.34 a.m. | Corporate & Regulatory | Legal Research

On 1 July 2019, the draft Fair Trading Regulation 2019 (NSW) (‘the draft Regulation’) and corresponding regulatory impact statement was released for public consultation. The draft Regulation will be supporting the administration and enforcement of the Fair Trading Act 1987 (NSW) (‘the Act’).

The existing Fair Trading Regulation 2012 (NSW) (‘the 2012 Regulation’) will be automatically repealed on 1 September 2019. The draft Regulation will remake the 2012 Regulation with some additional changes.

The draft Regulation aims to:

  • Regulate information standards for goods and services provided by certain retailers
  • Impose an industry code of conduct to motor vehicle insurers and repairers
  • Clarify exceptions in regards to gift card expiry date requirements
  • Set out offences under which penalty notices and corresponding fines may be issued

The Draft Regulation

On 28 February 2019, amendments to the Act from the Fair Trading Legislation Amendment (Reform) Act 2018 (NSW) commenced. Under the newly introduced section 47C in the Act, regulations may now prescribe information standards to the supply of particular goods and services within NSW. The draft Regulation contains two such information standards.

The information standard for fuel prices in the draft Regulation maintain the requirements under the current 2012 Regulation, with some additional provisions. The draft Regulation clarifies that the fuel price information standard is solely intended for service stations selling fuels, and excludes electricity from the definition of prescribed fuel. Therefore, electric vehicle recharging stations that offer only electricity are excluded from these requirements.

The draft Regulation also extends greater flexibility for service station operators in determining which fuel prices must be on display. Under the 2012 Regulation, 3 of the 4 types of fuel that must be displayed are specified. However, under the draft Regulation, the operator will be free to choose which 4 fuel types they will be displaying.

The draft Regulation will also introduce a new information standard on funeral service providers. An itemised price or price range of each funeral goods and services offered must be prominently displayed at the provider’s place of business, and where relevant on the homepage of the provider’s website. The 2012 Regulation only requires a provider to supply a written statement of itemised costs at the request of an individual consumer.

These provisions were drafted in light of complaints received in regards to the funeral service industry. Research found that consumers were likely to rely on word-of-mouth or experience, and were unaware of options and the breakdown of prices. Additionally, given the short time-frame in which arrangements need to be made, consumers have also been found to have been ‘up-sold’ or charged a higher price. This new information standard is currently scheduled to commence on 1 September 2019.

Under section 67 of the Act, the Commissioner for Fair Trading and their authorised officers are enabled to issue a penalty notice should a penalty offence be committed. These notices are used to enforce the Act where prosecution is not considered to be appropriate. The draft Regulation specifies a much larger range of offences against which a notice can be issued. The maximum penalties payable have also been increased, following the March 2017 Australian Consumer Law Review Final Report, which found that the previous penalty rates were insufficient to deter from highly profitable unlawful conduct. The new penalty amounts payable will also vary according to the nature of the offence committed. Individuals and corporations are also distinguished, with corporations being liable to a much higher fine. The 2012 Regulation enforces the same penalty amount on all offences, and makes no distinction between individual and corporate offenders.

Some of the questions posed for the consultation from the Regulatory Impact Statement include:

“Are there any other information standards that should be prescribed to apply within NSW?

Should a later commencement date for the funeral goods and services information standard be prescribed to give the industry time to transition to the new requirements? If so, when should it commence?

Are any urgent changes needed to the list of exemptions from the gift card expiry requirements, ahead of the introduction of the national scheme?”

Consultation on the draft Regulation and its Regulatory Impact Statement are currently open. Further details on the consultation and progress of the draft Regulation can be found on the Fair Trading NSW website.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.

Sources:

Draft Fair Trading Regulation 2019 (NSW) and regulatory impact statement available from TimeBase’s LawOne Service

Fair Trading Act 1987 (NSW) available from TimeBase’s LawOne Service

Fair Trading Legislation Amendment (Reform) Act 2018 (NSW) available from TimeBase’s LawOne Service

Fair Trading Regulation 2012 (NSW) available from TimeBase’s LawOne Service

Media Release: Remake of Fair Trading Regulation (NSW Government, 3 July 2019)

Fair Trading Regulation (NSW Fair Trading, 1 July 2019).

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