FAIR TRADING (TELEMARKETING) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 17 February 2009. Page 1276.)

The Hon. R.P. WORTLEY (21:07): The Fair Trading Act 1987 is a primary piece of legislation that protects consumers in South Australia from deceptive, misleading or otherwise unconscionable commercial conduct. The amendments comprised in the bill before us will update the Fair Trading Act so as to reflect changes in the way goods and services are marketed and transactions entered into. They address the increasing sophistication of telemarketing operations in the 21^st century, given the advent of electronic databases, the burgeoning of call centres and related innovations. Essentially, they extend the ambit of existing door-to-door sales provisions to regulate aspects of this quite pervasive telemarketing activity.

Telemarketing is a fact of life. We have all experienced the call when sitting down to dinner, or when we are settling in to watch the 7.30 Report after a long day at the legislative coalface. Of course, many legitimate companies, organisations and charities validly solicit consumers by telephone offering genuine services and products and the opportunity to contribute to worthy causes. Unfortunately, some are less genuine.

Most members of our community are equipped with the skills that enable them to manage these interactions, but some consumers are at risk. Some consumers are not aware of their rights or have limited life skills; some do not speak English as a first language, and some are still at school, perhaps working part time, and are entering into contracts for the first time; for example, for mobile phones or ring tones, and some are elderly, perhaps alone, and susceptible to those who would exploit them through unscrupulous and unconscionable practices.

It is beyond dispute that fraudulent telemarketers, of whom regrettably there are quite a few, understand human nature only too well. Who among us has not been susceptible to such phrases, in any number of environments, as, 'You've been selected to hear this offer,' or 'You'll receive a valuable free bonus if you purchase our product now,' or 'Act now before you miss out'? Or what about, 'You've won a free holiday or prize,' or 'You can't afford to miss out on this offer'?

This government is determined to protect people who, for whatever reason, are vulnerable to these importunings. The bill will protect consumers against the high-pressure techniques sometimes employed by salespeople who contact consumers by telephone. It is the government's aim to increase protection for consumers in circumstances where there is an inherent lack of opportunity to compare similar products or services. This bill sets out the requirements to be met by telemarketers when oral contracts are settled over the phone. At that time, consumers must be advised of the following:

that, starting on and including the day on which the consumer receives a written contract summary, a 10-day cooling-off period applies;

the amount of the total consideration to be paid or provided or, if the total bill is still to be calculated, the mechanism by which the total bill will be calculated;

detailed particulars of work to be carried out, including particulars required by the regulations; and

any other particulars.

Once the contract has been made orally and those matters disclosed, a written summary must be provided to the consumer, setting out the following:

the date on which the contract was entered into orally;

the amount of the total consideration to be paid or provided or, if the total bill is still to be calculated, the mechanism by which the total bill will be calculated; and

detailed particulars of work to be carried out, including particulars required by the regulations.

As a further safeguard, the amendments provide that the contractual terms must be printed or typewritten, although insertions and amendments may be handwritten, and the details of the supplier (if the dealer is not the supplier) specified. The contract summary must show at the top and bottom of the document a conspicuous statement that the contract is subject to a 10-day cooling-off period.

Included in the package must be a printed or typewritten notice in the prescribed terms explaining the consumer's right to rescind and a printed or typewritten notice, as prescribed, to be used in the event of rescission. All handwriting in these documents must be readily legible (save, of course, for a signature or initial) to avoid ambiguity or error.

In effect, the bill provides that a cooling-off period will apply in circumstances where, as the result of unsolicited contact by a telemarketer, a person enters a contract to purchase goods or services. The cooling-off period will allow consumers to reflect on the transaction when the heat of the moment has passed. The other measures I have outlined provide additional protections in circumstances where undue pressure may have been exerted.

This bill complements legislation already passed in New South Wales and Victoria and the commonwealth's 'Do not call' provisions. So, it augments the safeguards already in place within our Fair Trading Act. I commend the bill to the house.

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (21:12): I understand that no other honourable member wishes to speak on this bill. By way of concluding remarks, I thank those members who contributed to the second reading debate, and I thank them for their support for this bill.

This bill provides for a cooling-off period on contracts for goods and services that result from a trader making unsolicited contact with the consumer by telephone. It extends the current operations in relation to the door-to-door provisions in the Fair Trading Act to also regulate telemarketing activity in the same sort of manner. This provision already exists in both New South Wales and Victoria. It is an inordinately sensible bill, and I look forward to it being dealt with expeditiously through the committee stage.

Bill read a second time and taken through its remaining stages.