The NSW Government has enforced new provisions in the Fair Trading Act 1987 (NSW) that require all businesses supplying goods or services in NSW to be more transparent with consumers and comply with the latest mandatory disclosure obligations.
The changes require businesses in NSW to disclose:
- Substance and effect of terms or conditions in their contract that may prejudice the interest of consumers
- Commission or referral arrangements with another supplier
With new disclosure obligations, NSW Governments aim to increase transparency and competition between the suppliers and consumers by disclosing the relevant information about the goods and services, allowing them to make thoughtful decisions.
What are The Changes For Disclosure Obligations?
Before supplying goods or services, all businesses in NSW have to follow mandatory obligations to ensure the customer understands the substance and effect of terms in the contract that may prejudice their interests.
Some of the terms or conditions that may require disclosure include clauses that:
- Exclude a supplier’s liability
- State if the consumer is liable for damage to goods;
- Allow the supplier to provide personal data and information about that consumer to third parties; and
- Require the consumer to pay an exit fee, a balloon payment (a final payment made at the end of the loan to clear the debt) or other related payments.
- Intermediaries will also have to disclose their commission or referral arrangements to their customers if they receive incentives from another supplier. Customers should be informed about the existence of the arrangement. However, intermediaries can choose not to disclose the nature or value of the incentive.
What Businesses Are Affected From New Disclosure Obligations?
The new disclosure obligations are not limited to businesses in NSW that supply goods or services to NSW customers. The law revision also includes those businesses located outside NSW whose customers are from NSW. Though other jurisdictions have yet not adopted such NSW-specific changes for the supply of goods or services.
The new disclosure obligations apply to those businesses who supply goods and services where:
- The amount payable does not exceed $100,000 (increased from $40,000 as of 1 July 2021);
- The goods were acquired for personal, domestic, or household use, or consumption; and
- The goods consisted of a vehicle or trailer acquired for transporting.
How Do You Satisfy The Disclosure Requirements?
The NSW Government has made it mandatory for businesses in NSW to disclose before supplying goods or services to NSW customers. For instance, the supplier will have to disclose terms and conditions before the consumer signs the contract, makes payment or commits to the supply of their goods or services.
According to the Fair Trading NSW, the businesses will have to:
- Be clear and concise while disclosing information to the customer;
- Be proactive and upfront to the customer about the relevant terms and conditions;
- Consider automatic disclosures, if appropriate to the customer; and
- Consider satisfying the obligation to ensure the consumer is aware of any terms and conditions which may substantially prejudice their interests.