Thursday, 20 September 2018
Treasury Laws Amendment (Gift Cards) Bill 2018; Second Reading
That this bill be now read a second time.
This bill amends the Australian Consumer Law, contained in schedule 2 of the Competition and Consumer Act 2010, to introduce a national regime for regulation of gift cards.
It introduces a minimum three-year expiry period, requires expiry date information to be disclosed and bans the charging of post-supply fees to provide consumers with greater confidence and make gift cards simpler and fairer for all consumers.
At the same time, the reforms will ensure that Australian businesses have one set of clear rules to follow relating to the regulation of gift cards.
Gift card terms and conditions vary widely, making it hard for consumers to understand their rights and obligations. Consumers are often frustrated and experience financial loss from expired cards.
There is currently no uniform regulation for minimum expiry periods and post-supply fees, with different rules applying across jurisdictions. The inconsistencies have created uncertainty for consumers and a regulatory burden for businesses.
On 18 October last year, the New South Wales parliament passed the Fair Trading Amendment (Ticket Scalping and Gift Cards) Act 2017. This law commenced on 31 March this year, introducing a minimum three-year expiry for gift cards sold in New South Wales.
Three years has generally been considered a reasonable period of time for consumers to use gift cards and simultaneously provides businesses with sufficient certainty to manage their liabilities. To date a number of national retailers have already adopted a three-year minimum expiry period or longer terms following the introduction of gift card laws in New South Wales.
The bill imposes a three-year minimum nationally, balancing consumer rights and business compliance. It will also require the expiry date information to be prominently displayed on the card. This will ensure that consumers are able to make informed purchasing decisions by having access to the information at the time it is needed and on the gift card itself, rather than on accompanying packaging or on a website.
When a gift card is given, it is not necessarily the case that the expiry date information is clear to the gift recipient. The form of disclosure provides the needed flexibility to businesses whilst being clear for consumers.
Further, under the national regime the charging of post-supply fees, such as inactivity and balance-checking fees, after the gift card has been supplied will be prohibited. The bill's regulation-making power will also allow the government to provide an exhaustive list of fees for gift cards that can be charged post supply.
In addition, regulation-making powers contained in the bill allow for certain gift cards, persons and gift cards supplied in particular circumstances to be exempt from all or some of the requirements imposed by this reform. This will provide flexibility to support industry to adopt innovative marketing techniques to encourage demand and manage stock levels. It will also allow the law to adapt to changes in tech and business activities to ensure essential activities involving gift cards are not curtailed to the detriment of businesses and consumers.
It is an offence to contravene the reforms contained in the bill. This will act as a strong deterrent against misconduct that can have serious detriment for consumers, thereby enhancing the integrity of the regulatory regime.
A contravention of the minimum three-year expiry period, disclosure of expiry information and post-supply fee requirements carries a maximum penalty of $30,000 for a body corporate and $6,000 for persons other than a body corporate. The maximum penalties are consistent with similar consumer protections in the Australian Consumer Law.
Compliance with these reforms will be monitored and enforced by the ACCC.
To provide industry with time to adapt to the new regime, the reforms will commence on 1 November next year, just before Christmas. This will also ensure that these important protections for consumers are in place for that important Christmas period.
Consumers and businesses support this reform, as it improves consumer outcomes, provides consistency and is workable for businesses. The states and territories have also shown their support for a national regime.
Full details of the measure are explained in the explanatory memorandum.
I commend the bill to the House.