Fair Trading Amendment Bill



About this Item
SubjectsConsumer Affairs; Advertising; Press; Government Department: New South Wales: Fair Trading
SpeakersTurner Mr John; Perry Mrs Barbara; Maguire Mr Daryl; Judge Ms Virginia; D'Amore Ms Angela; Beamer Ms Diane
BusinessBill, Second Reading, Motion


    FAIR TRADING AMENDMENT BILL
Page: 798


    Second Reading

    Debate resumed from 24 May 2006.

    Mr JOHN TURNER (Myall Lakes) [12.28 p.m.]: The Opposition will not oppose this bill, but it has reservations about some parts of it. The bill, which has a number of aspects, amends the Fair Trading Act to extend the application of the Act to actions outside New South Wales in so far as possible. The premise is that in this modern age, actions by people outside the State relating to consumer fraud and other actions that are actionable through the Department of Fair Trading can impact on people in New South Wales. The Crimes Act gives the department extraterritorial rights to take such action. I understand from the Minister's second reading speech that normally, however, one agency would take action and the other agencies would come in behind it to seek national injunctions against those who infringe upon the consumer rights of New South Wales by coming through the back door of another State. The Opposition agrees with that.

    Another aim of the bill is to control the practice of false billing and false advertising when an authority to advertise has not been in place. I have been the victim of that practice on the part of an organisation purporting to hold itself out as a certain body. I got the bill. We were quick enough to realise, however, that we had not advertised with that organisation—indeed, we had no intention of advertising with it. The legislation provides that if people are to send out these unsolicited offers for entries in directories, they will have to give clear notification on the document, in 18-point font, "This is not a bill. You are not required to pay money." Many large organisations have been targeted, and the Minister's second reading speech referred to the fact that millions of dollars had been reaped through this corrupt and illegal practice. I do not know how far the bill will go towards stamping out the practice, because when one door closes another door seems to be opened by these unscrupulous people. That takes me to the scams that are operating around the place, but I will confine myself to advertising.

    Large corporations, government bodies and newspapers with a circulation of 10,000 or more will be exempt from this part of the bill. I am a little concerned—and perhaps the Minister will address this in her reply—about the provision that says that for a newspaper organisation to be exempt it must have a circulation of 10,000. Many newspapers in my electorate have a circulation of far less than that. For example, the Great Lakes Advocate has a circulation of 1,500 or 1,800 and, similarly, the circulation of the Gloucester Advocate would be quite small. But I presume they would be caught under the corporate provisions of the exemption in the sense that they are owned by Rural Press, which circulates a large number of newspapers. Indeed, that large public company would publish millions of newspapers a year. The provision should be clarified so that smaller newspapers do not have to go through the authority rigmarole that is required under the Act if they are not granted exemption.

    I want to speak briefly about the amendments to section 20. Although we will not oppose them, I will put some concerns on the record. First I will go through the areas of no conflict. There is a provision empowering the Commissioner for Fair Trading to order the sale, destruction or disposal of items in the possession of the commissioner that are obtained under search warrant and are no longer needed and cannot be returned to the custody of any person. Apparently that provision does not exist at present and it is creating problems within the Office of Fair Trading.

    Ms Diane Beamer: Storage problems.

    Mr JOHN TURNER: As the Minister said, there are storage problems, and I can understand that. I presume that all due diligence would be undertaken in relation to that provision to ensure that people who are entitled to the items are properly sought out and have their property returned to them if it is at all feasible. Another provision of the bill seeks to rationalise advisory councils, with regard to both the number and size of them. I note that some councils, when they are formed, would have a membership of between 6 and 16, and some between 5 and 15. I presume this gives the Minister some leeway as to whom she selects for the advisory councils. Obviously a council would not need to have 16 members, but perhaps a number in between to ensure it has quality membership.

    I raised this matter with a number of organisations to obtain their views. The Master Builders Association contacted me and advised that applications for positions on the ministerial council closed in March and that no advice was received that a new home building council was to be created under the Home Building Act at that time. It seems that we may have this legislation back to front. I am not sure why applications for positions on the ministerial council closed in March given that the legislation is before the House in June. In December 2003 the home building advisory council was reconstituted as a result of the Grellman inquiry, and future meetings were consequently identified as meetings of the reconstituted council. Grellman recommended the establishment of the warranty scheme board and the home warranty advisory council.

    The trade notes that it has not received any notice as to the function of the proposed new home building council and whether it will include the function of a home warranty advisory council, as recommended by Grellman. Perhaps the Minister will determine whether the recommended home warranty advisory council will be part of the home building council in due course. I have not received anything from the Motor Traders Association in relation to the proposed changes to the Council of the Motor Vehicle Repair Industry Authority and the establishment of the Motor Trade Advisory Council. I trust that the Government has consulted with the organisations that will be affected by that. Perhaps the Minister will clarify that in her reply as well. I return to the part of the bill that is of concern to me. Including the provisions of section 9 (1) (c) and section 9 (2) in section 20 means that the director general may investigate a matter that is the subject of a complaint received under section 9 (1) (c), or may refer the matter to a public authority or other body that the director general considers best able to take action or provide advice in relation to the complaint. Section 9 (2) of the Act provides:

    (2) The Director-General shall:

    (a) keep under critical examination, and from time to time report to the Minister on, the laws in force, and other matters, relating to the interests of consumers, and
    (b) report to the Minister on matters relating to the interests of consumers that are referred to the Director-General by the Minister,

    and, for those purposes, may conduct research and make investigations.

    The powers under section 20 are quite significant, and the proposals in the bill will enhance those powers. I am concerned that the functions of the director general as set out in the wording I have just enunciated—particularly in section 9 (2) (b)—could lead to the use of coercive powers in certain instances. There does not appear to be any restraint on that other than that the powers can only be issued and used by the director general or his or her delegate. There have been examples of zealous inspectors operating under the powers currently available to them, and those examples have been enunciated. I intend to touch on some of them in a moment. I do not want to see inspectors and employees of the department assuming bovver boy tactics in relation to traders. This is what is known as fair trading, and there must be a balance between the consumer and the trader in this area.

    I have received many complaints where a trader has been prejudged and deemed at fault, and the powers under the Act have been used indiscriminately and in an agitating manner. In 2004 I made representations to the then Minister for Fair Trading, the Hon. Reba Meagher, about a real estate agent in my electorate—whom I do not intend to name—who unwittingly was drawn into a dispute. His late father and another person were involved in a real estate transaction. The other person felt aggrieved and made a complaint to the Office of Fair Trading. The department contacted my constituent, who then travelled to the Newcastle office to assist the department in its inquiries. He supplied full copies of sales files and all other necessary information to a departmental officer. The officer said that if he needed further information he would contact my constituent and make mutual arrangements in that regard.

    Three weeks later two other departmental officers arrived unannounced at my constituent's real estate office. Only one officer identified himself by business card. At the time my constituent was not in the office. However, his wife was present, together with a number of clients of the firm, including two tenants of properties administered by the business. I point out that the office is in a small country town, where everybody knows one another. In front of the clients and the tenants, and without asking for the name or job description of my constituent's wife, the two officers read from a schedule and demanded documents. My constituent's wife, who was acutely embarrassed because of the presence of clients and the personal nature of the matter, asked the officers to write down their requirements. She said that she or her husband would attend to the inquiry and the officers could return later and collect the documents. The officers acted in a demanding, demeaning and unsatisfactory manner. In a letter to me my constituent wrote:

    What I find insulting is that unsubstantiated allegations were canvassed publicly in a small country office.

    The town has a population of only 1,100. The letter continued:

    The conduct of the investigators from the Department of Fair Trading is completely unwarranted considering I have fulfilled all requests of the office.

    That case study is relevant to my concerns about the amendments in the bill. I have received assurances from the Minister's office that the provisions will be carefully monitored and it is hoped that such situations will not occur. I note that the honourable member for Londonderry, the Chairman of the Legislation Review Committee, has also received assurances from the Minister's office about these provisions. The case I referred to is not an isolated incident. In my capacity as the shadow Minister for Fair Trading I was approached by a person who had technically breached the Act. I cannot give too many details about the matter because it is before the court.

    A leading auctioneer, who had 30 to 40 years experience in the business and an unblemished record and had lectured on auctioneering, was required to undertake a bridging course of a couple hours duration. He had been exempted from the accreditation course. He understood that on completion of the bridging course he would be able to conduct auctions. In my view, he could conduct auctions anyway. The paperwork from the department was not processed in the required time. He conducted an auction and was found to have technically breached the Act. As I said, I am limited in what I can say about the matter. This person was treated in the same manner. The heavy hand of the department came down on him and officers turned up at his office at odd hours making demands.

    Such conduct by the department is not conducive to fair practice. Fair trade means a fair trade between the consumer and the trader. I do not believe that principle is operating at the moment. To give a third example—again in my electorate and similar to the situation that occurred with the real estate agent in the small country town—a man selling toys was raided when his shop was full of customers. During the raid the departmental officers made loud allegations about him. He conducted himself in a manner that he thought was correct and proper. When he was told there were banned toys on the shelves, he immediately removed them. A short time later he was revisited by the officers, who went into his storeroom where they had observed the retailer put the toys and charged him for having the toys on his premises. We do not want to see that type of conduct. The Opposition's concerns about that part of the bill are fair and reasonable.

    Although similar provisions operate in Victoria, it does not necessarily follow that it is good law. I have recounted three stories where there has been a zealous reaction by the Office of Fair Trading. However, the Minister has advised the chairman of the Legislation Review Committee that the provision will be carefully monitored and excessive use of the power will be contained. The Opposition will not oppose the bill but my colleague the honourable member for Wagga Wagga will speak to it and, I regret to say, highlight some areas in which the department has been zealous in its actions, and express his concerns about the provisions I have referred to.

    Mrs BARBARA PERRY (Auburn) [12.46 p.m.]: I am pleased to support the Fair Trading Amendment Bill. The role of the Office of Fair Trading is to serve the consumers and traders of New South Wales. The office safeguards consumer rights, and advises businesses and traders on fair and ethical practice. About five million requests for Fair Trading services are received each year via phone, counter, mail and electronic channels. On more than 30,000 occasions a member of the public has sought help with marketplace disputes, and 74 per cent of those disputes have been successfully negotiated. More than 14,000 compliance-related activities have been conducted. The legislation that underpins all this activity is the Fair Trading Act 1987, which is the principal legislation that protects New South Wales consumers from deceptive, dishonest and unfair commercial conduct. The Act also sets out the functions and powers of the Commissioner for Fair Trading, and advises on the establishment of ministerial advisory councils.

    The amendments will enhance the efficiency and effectiveness of the Commissioner for Fair Trading and her staff in carrying out their work on behalf of the people of New South Wales. I wish to speak in support of the proposals relating to the commissioner's powers. The functions of the Commissioner for Fair Trading are set out in section 9 of the Fair Trading Act. One effect of section 9 is to enable the commissioner to take action to remedy breaches of legislation. The Act provides investigators appointed by the commissioner with powers of entry and inspection, the power to search and seize under the authority of a search warrant, and the power to obtain information, documents and evidence.

    The power to obtain information cannot be used in support of any of the other functions of the commissioner. For example, when an officer of the Office of Fair Trading is working to resolve a complaint from a consumer, there may be no suggestion that the trader has acted in contravention of the law. The officer seeks to obtain information from the trader in order to negotiate a resolution to a dispute, but must rely on the good faith of the trader to supply the information. I am happy to say that in the majority of cases traders are co-operative, but there are instances where a power to demand information would assist in achieving a fair outcome.

    The proposed amendments to section 20 will permit the commissioner to exercise the power to obtain information, documents and evidence in relation to matters that are the subject of a complaint received under section 9, or matters that are the subject of investigations into the laws in force and other matters relating to the interests of consumers carried out in accordance with section 9. As the honourable member for Myall Lakes said, the Victorian Fair Trading Act is a precedent. However, the Minister has given an assurance that this new power will not be used lightly.

    The bill provides that the commissioner can delegate these powers to an officer. In the case of the Office of Fair Trading, only the senior officers in the customer service, compliance or policy fields will have such a delegation, and circumstances in which the power is used will be clearly defined. Of course, in most instances that power will not be needed. Traders generally co-operate with the Office of Fair Trading in resolving disputes with consumers. These powers become essential to the commissioner when a rogue trader disregards the interests of consumers and refuses to allow the Office of Fair Trading to conciliate and negotiate a solution to a consumer's complaint. The amendment will ensure that the commissioner has the powers she needs to act in the interests of New South Wales consumers. I commend the bill to the House.

    Mr DARYL MAGUIRE (Wagga Wagga) [12.50 p.m.]: Having had a business retail background for 23 years before coming into this place, I take a particular interest in fair trading, as all retailers and businesspeople should. The Office of Fair Trading is an important agency on which consumers rely, and business executives and business operators must comply with its orders. The shadow Minister has led for the Opposition and outlined our concerns about certain aspects of the bill. I read the Minister's second reading speech very carefully and I will refer in particular to the proposed amendments to section 20, which relate to complaints received under section 9.

    On 2 March this year I raised in this House a problem with a company called Manton Auctioneers Pty Limited. By way of a private member's statement I drew to the attention of the House a matter concerning Marcia Sutton, who is a constituent of mine. In March 2004 she obtained from Victorian company Manton Auctioneers Pty Limited estimates of between $23,300 and $28,800 to sell her antiques in Victoria. Company director Colleen Willcox failed to place reserve prices on the antiques, as promised, and claimed that the antiques were sold for $7,220, less her commission. On that occasion I stated that several letters of demand from Marcia Sutton's solicitor had failed to result in any payment for the items and the Office of Fair Trading was unable to resolve the matter.

    I will further enlighten the Minister and her department on the actions that have been taken by Marcia Sutton to obtain justice and, in fact, her dues in the form of the money collected for the sale of her goods. I hope the Minister can tell me whether this legislation will help her department to address the concerns I raised in that private member's statement. In response to my statement Minister Milton Orkopoulos said that he would take up the two issues I referred to: representations to the Minister, and uniformity in consumer protection laws and legislation relating to auctioneers. I hope this legislation addresses those issues. Further to my private member's statement, Marcia Sutton has written to me providing an update. She states:

    March 2004 Estimates were given by Manton Auctioneers Pty. Ltd. of between $23.300 and $28.800 to sell my antiques.

    The Director Mrs. Colleen Wilcox claims without proof that she sold the antiques for $7,220. (less her commission) She failed to place the reserves as promised.

    Several letters of demand from the solicitors failed to receive any payment for these items.

    Fair Trading Office unable to resolve the matter. Application to the CTTT was made resulting in A Court Order for Manton's to pay me the money by 8/10/04. This Order has been ignored by Colleen Wilcox.

    Court Order registered at Wagga Wagga, then registered at Frankston Victoria, with costs and interest to the 16/11/05. This Court Order now totals $11,963.91. The Sheriff was paid $165.00 to seize property, Mrs. Wilcox said she didn't have anything to seize. Because of bankruptcy laws the sheriff had to leave. I paid the sheriff to seize the company vehicle, valued at over $40.000 it cannot be seized (under finance)

    Tax Office couldn't help regarding GST payment on items sold because of privacy laws.

    Several letters to Fair Trading and the CTTT regarding my attempts to enforce the order, their answer was that they had dealt with the matter, and suggested the Local Court.

    Several letters to the Attorney General asking for assistance. Their reply suggested The dept. of Fair Trading and the Sheriff.

    Prime Ministers Office suggested I contact ACCC and ASIC.

    ASIC have decided (without reason) that they will not investigate this company. According to ASIC information on (Phoenix Companies) it is against the law to register another Company leaving the previous one in debt. Mrs Wilcox now operates her auctions under her new Company (Wilcox Auctioneers Pty. Ltd.) Again ACIC have decided (without reason) not to investigate.

    A company solicitor started action to wind up Manton Auctioneers, all correspondence was ignored by Colleen Wilcox. It will cost thousands to proceed with this action, at the end of which we would find that the director has removed all asserts.

    Mrs Sutton has contacted my office on several occasions. Her letter continues:

    I contact detectives regarding fraud, May 2005. My statement was taken at Wagga then transferred to Hastings Victoria. The detectives there said they have to prove that Colleen Wilcox intended to commit fraud.

    I have over the past 20 months attempted to contact Mrs. Wilcox and ask for my money, because of these attempts she then used the courts to take out an intervention order against me at further expense to me I travelled to Melbourne to have it successfully revoked.

    Mrs Sutton has also contacted her Federal member, Mrs Kay Hull, who suggested that she write to the Hon. Mal Brough and the Hon. Chris Pearce, who in turn suggested she contact the Australian Securities and Investments Commission [ASIC]. The Hon. Philip Ruddock suggested that she take local court action, which she had already taken. Mrs Sutton's letter continues:

    I wrote to the Ombudsman regarding ASIC the Ombudsman (without giving a reason) said ASIC would not be further investigated regarding my complaint. According to Mr. Hamilton-Smith from the Ombudsman's Office he considered Manton' s actions as theft.
    I have again written to the Ombudsman regarding ASIC information on (Phoenix Companies)

    I have written to The Office of Fair Trading (Compliance Branch) regarding willful disobedience during the hearings, and for disobeying the Court Order.

    I have made an application with the CTTT against the Director for not complying with the Order. (although I was told I cannot do this I have a hearing date set for the 25/1/06) I have to convince the Member to continue with a hearing against the director.

    I need to provide this information to enable the Minister to tell me whether she can take action against this company, which I deem as operating fraudulently. Who knows how many other actions have been taken against this new company, which was clearly out to deceive Mrs Sutton. Another letter from Mrs Sutton states:

    Further to my problem with Manton Auctioneers, My application with CTTT against Colleen Wilcox and her conduct as a director was finalized on Wednesday 25/1/06 without success to continue, as it cannot be separated from the finalized matter the company, as the judgment has already been made.

    I have lodged a complaint with Fair Trading compliance Branch in regards to Colleen Wilcox Willful disobedience of the Court Order.

    And her conduct during the hearings, by referring to the CTTT Act 2001 Numbers 42 and 71.

    Colleen Wilcox provided information to the tribunal in the form of an Affidavit and Declaration, knowing the information was false and misleading.

    Some Companies in Victoria are permitted to operate without assets, Insurance, or a Licence, (as it is with Manton's). Colleen has now allowed Manton's to go into liquidation (Worrells in Victoria are appointed) copy enclosed.

    This is a deliberate attempt to of course pay debts, I believe. She has removed all assets from Manton's. She now operates as I said as Wilcox Auctioneers.

    Marcia Sutton's concerns with regard to this legislation are just. This woman has explored every avenue and approached every department available to her to try to recover the funds due to her. In a further update on 2 June she wrote:

    Thank you for your correspondence in reference to The Minister for Fair Trading Ms. Diane Beamer 30/5/06.

    That was a reference to the Minister's second reading speech relating to this proposed legislation.

    My concerns are that I have been issued with a CTTT Court Order knowing it is impossible to enforce, due to Companies being permitted to operate without a Licence, Insurance, and without Assets …

    No penalty in place for deliberately failing to comply with a Court Order …

    False and misleading statements provided to the Tribunal by Mrs. Wilcox in her Affidavit and Declaration without supporting evidence, has been addressed in my letter to the Compliance Branch (waiting on a reply) …

    Contempt of Court is also a crime CTTT Act 2001 42. information from Mr. Chris Lacy (Diane Beamer's Office)
    I have been advised to contact the Police regarding this matter.

    If I understand the Hansard, amendments will be made with the issue regarding Misleading Deceptive and Unconscionable conduct.

    Mrs. Wilcox has not been held accountable for her Misleading and Deceptive Estimates.

    As a consumer with little knowledge of Court proceedings, it is difficult to be aware of one' s rights during the hearings …

    In summary through dealing with the matter extensively over a two year period, I have been dealing with the Respondent (Mrs. Wilcox) who blatantly indicated to me that she knew how the "system" works and I would be wasting my time pursuing any money owed to me.

    From what I have [sourced], there are already penalties in place but sadly it appears these penalties are only there to frighten people into fulfilling their obligation to society.

    Those that contend and boast that they know how the "system"
    works (are the winners)

    Advice had been received from the Ombudsman that only a certain amount of cases can be dealt with due to lack of resources and finance. Here again the "system" come into play. …

    Mrs Sutton also expressed her gratitude for the assistance provided to her so far. [Extension of time agreed to.]

    I know that my contribution has been lengthy. I apologise for that, but the information I am providing is necessary to enable the Minister to give a clear and accurate response in relation to the intent of the changes to sections 9 and 20 regarding the investigation of official complaints to the Commissioner for Fair Trading. I remind the Minister that the details of this case are recorded in Hansard and the matter has been ongoing for some time. Will this legislation enable the Minister and her department to retrospectively review this case and take action to ensure that it is dealt with? The legislation is designed to give the Department of Fair Trading the ability to conduct investigations in other States.

    If further complaints are made to the department about Manton Auctioneers, or Wilcox Auctioneers, the name by which it now trades, will this legislation enable the department to investigate those complaints and take action in New South Wales or Victoria to ensure that this kind of an ethical trading does not continue? Mrs Sutton has lost a lot of money; and she has gone to an enormous amount of trouble and expense to seek redress. Despite the fact that she has approached all departments, Ministers and commissioners in an attempt to address this problem she has not been able to achieve justice. Will this bill do that? Will the changes to sections 9 and 20 achieve an outcome if complaints are lodged in future about this company, or others trading across borders?

    Ms VIRGINIA JUDGE (Strathfield) [1.04 p.m.]: I am pleased to support the Fair Trading Amendment Bill. I commend the Minister and the hardworking staff in her department for bringing this bill before the House. In essence, the bill deals with two issues. First, it extends the net of the legislation so that it can apply extraterritorially to protect consumers and small business operators from unscrupulous traders. Second, it seeks to reduce the advisory bodies from five to four. There has been a considerable amount of overlap with regard to the two bodies that deal with motor trading, for example, membership. The legislation will allow that to be finetuned so that duplication can be avoided. The Office of Fair Trading has an important enforcement role in ensuring fairness in the New South Wales marketplace and protection of consumers and small business from unscrupulous traders.

    The principal legislation that underpins this activity is the Fair Trading Act 1987. The amendments will enhance the effectiveness of the Act. We live in a world in which economic activity is increasingly national and global in scope. Sadly, scams cross borders and regulators also have to be able to operate across borders. In 2004 the State and Territory Fair Trading and Consumer Protection Ministers agreed there was a need to overcome the legal and logistical complications in taking action against traders with national operations or operations in other jurisdictions. The Ministers proposed to reduce duplication of regulatory effort by States and Territories and enhance collective action to address consumer interests nationally. That has to be a step in the right direction.

    To achieve that end, the Ministers agreed to the principles of seeking nationally beneficial outcomes and enhanced co-ordination with respect to compliance, investigation and enforcement action. New South Wales is an active participant in co-operative strategies to deal with traders who engage in unlawful conduct in several jurisdictions at once. However, New South Wales has been at a disadvantage because of the limited territorial reach of the Fair Trading Act. For example, a trader engaging in unlawful practices had an address in Sydney but traded in all States. In taking action against the trader, the New South Wales Office of Fair Trading sought to obtain an injunction with national application, but, as the Fair Trading Act was interpreted as applying only to New South Wales, the injunction granted was limited to New South Wales.

    The bill will remedy that situation by extending the operation of the Fair Trading Act to conduct that occurs outside New South Wales but has a relevant link within New South Wales. The amendment will bring the New South Wales Fair Trading Act into line with the fair trading legislation of the Australian Capital Territory, Queensland, South Australia, Tasmania, Victoria and Western Australia, all of which have provisions giving them operation outside of State or Territory borders if there is a sufficient link with the State or Territory. Proposed section 5A makes it clear that the Fair Trading Act applies extraterritorially to the full extent of the Parliament's legislative power and that it extends to conduct either in or outside New South Wales that is connected with goods or services supplied in New South Wales, or affects a person in New South Wales, or results in loss or damage in New South Wales.

    The Fair Trading Act 1987 establishes a number of statutory bodies that provide advice to the Minister and Commissioner for Fair Trading in relation to a number of areas within the portfolio. The proposed amendments will retain three existing advisory councils—Fair Trading, Property Services and Retirement Villages. Recently the hardworking Minister for Fair Trading attended a Cabinet meeting in my electorate. She took the time to speak to residents of a retirement village in the electorate about some of the proposed changes. It was a very successful meeting. Having digressed somewhat, I return to the bill. The bill will abolish the Council of the Motor Vehicle Repair Industry Authority and amalgamate that council with the Motor Trade Advisory Council to form the Motor Vehicle Industry Advisory Council. Membership numbers are also rationalised, with each advisory council to have not fewer than six and not more than sixteen members. Those reforms to the ministerial councils will ensure that they function more efficiently and are better able to meet their obligations under the Fair Trading Act. I encourage all honourable members to support the bill.

    Ms ANGELA D'AMORE (Drummoyne) [1.09 p.m.]: I support the bill, particularly the aspects regarding false billing and the power of the Office of Fair Trading to destroy items. False billing is an example of scam activity that has led to the implementation of a national strategy to identify and act against major operators with a view to closing down their businesses. False billing, also known as invoice fraud, is the practice of fraudulently demanding payment for unsolicited advertising in a publication or trade directory. Operators target small businesses and trick them into paying for advertising services they never ordered. False billing is prohibited by fair trading legislation in all States and action has been taken against operators who purport to publish sham journals with names such as "National Firefighters", "Safety Gazette", "On Patrol", "National Disaster Relief News" and "National Police Bulletin".

    Running a successful prosecution against these fraudsters is extremely resource intensive. In an attempt to reduce the level of false billing and make prosecution of false billers easier, Queensland and Victoria have amended their fair trading legislation to include provisions additional to those applying in New South Wales. The bill will adopt similar provisions. The proposed amendment to section 58 provides that a person shall be taken to be demanding payment if they send an invoice or other document stating the amount of a payment or the price of goods or services, unless the document contains a prescribed statement at the top of the first page, in upper case and not less than 18 point font, which states, "This is not a bill. You are not required to pay any money."

    The inclusion of such a clear and prominent statement is expected to reduce the likelihood that small businesses will inadvertently pay for unsolicited goods or services or unauthorised directory entries and, therefore, act as a disincentive to false billers. The requirement to include the statement will also facilitate the prosecution of false billers who fail to comply by making it easier to prove that the false biller demanded payment for unsolicited goods and services or unauthorised directory entries. The introduction in New South Wales of the requirement, also under section 58, to have written authority for placing an entry in a directory dramatically reduced the level of false billing in relation to directories. However, that requirement did not apply to the publishing of advertisements, and false billers have taken advantage of this regulatory gap. In 2003 Victoria closed this gap by aligning the requirements for publishing an advertisement with those for placing an entry in a directory.

    Proposed section 58A will harmonise with the Victorian provisions by providing that it is an offence to assert the right to payment for certain unauthorised advertisements. Proposed section 58A mirrors the provisions in section 58 with regard to directory entries, so that a person is prohibited from demanding payment for publication of an advertisement unless that person has obtained written authority to publish. Proposed section 58A contains the same exemptions as those that apply in Victoria. They ensure that newspapers and other legitimate publications that carry large numbers of advertisements are not subject to time-consuming written authority requirements.

    The other amendment that I wish to refer to relates to items held in the possession of the Office of Fair Trading. In 2004 the Government amended the Fair Trading Act to empower investigators, under the authority of a search warrant, to enter and search any place for evidence of a contravention of the Act and to seize anything that is connected with any such contravention. Once these items are no longer required as evidence, they are returned, if possible, to whomever had lawful possession of them. If it is not possible to return such items to the custody of any person, they are retained by the Office of Fair Trading, as there is no power to destroy or dispose of these items. Proposed section 19A provides for anything seized under the authority of a search warrant to be sold, destroyed or otherwise disposed of if it is not required as evidence and cannot be returned to someone who had lawful possession of it. The proceeds of any sale are to be paid to the Treasurer for payment into the Consolidated Fund. Proposed section 93 contains the same provisions in respect of anything obtained in the course of an investigation, other than anything seized under a search warrant. I commend the bill to the House.

    Ms DIANE BEAMER (Mulgoa—Minister for Western Sydney, Minister for Fair Trading, and Minister Assisting the Minister for Commerce) [1.13 p.m.], in reply: I thank the honourable member for Auburn, the honourable member for Strathfield, the honourable member for Drummoyne, the honourable member for Myall Lakes, and the honourable member for Wagga Wagga for their contributions to the debate on this important bill. In reply I will address a number of issues raised by the honourable member for Myall Lakes and the honourable member for Wagga Wagga. The honourable member for Myall Lakes raised concerns about the expansion of the power of the commissioner to obtain information. Although the commissioner already has some power to request information, that power does not extend to all of her functions. The amendment in the bill will provide the commissioner with the power to request information to assist her in carrying out all of her duties.

    As has been mentioned, the amendment mirrors provisions contained in Victorian legislation. It is a power of last resort and will be used with great discretion. Generally, traders co-operate with fair trading investigations. That means that this power will rarely need to be used. It is important to note, however, that information that is obtained through this process will be inadmissible in any criminal proceedings. The Government believes there is a clear consumer interest in the commissioner having this power—that is the reason for this amendment—but it should be made clear that it cannot be used as a tool in criminal proceedings.

    The honourable member for Myall Lakes also raised concerns about the circulation of 10,000 copies per week or more of a publication. That relates to listed corporations and their subsidiaries that have an audited accreditation of 10,000, not only an individual country newspaper. The honourable member for Myall Lakes asked why advertisements have been placed regarding advisory councils. The advertisements were placed in anticipation of this bill being enacted. Membership of advisory bodies has ceased and we want to make sure that we can quickly transition into the new advisory councils that are to be set up.

    The honourable member for Wagga Wagga outlined the circumstances of one of his constituents. The person involved may be assisted by some of the provisions of the bill that extend the power of the Fair Trading Act outside New South Wales to cover cases where consumers in New South Wales are affected by the conduct of people in another State. The Office of Fair Trading can co-operate with Victoria to investigate cases such as that mentioned by the honourable member for Wagga Wagga. There are certainly some sad cases in which people with outstanding litigation against a person who has gone bankrupt cannot retrieve their money from that person. However, it appears that most of the complaints made by the honourable member for Wagga Wagga should be addressed by the Australian Securities and Investments Commission. I suggest he continue to rigorously pursue, through his Federal colleagues, the avenues he spoke about.

    The Fair Trading Act is the principal statute protecting New South Wales consumers from deceptive and dishonest conduct. The amendments in the bill that will outlaw false billing and allow the Office of Fair Trading to take action against conduct that occurs outside New South Wales will increase the level of protection provided to New South Wales consumers. The other amendments contained in this bill will assist the commissioner and her staff in carrying out her functions more efficiently, ensuring New South Wales consumers are provided with the protection they deserve. I commend the bill to the House.

    Motion agreed to.

    Bill read a second time and passed through remaining stages.