Australian Consumer Law what every RTO should know June 2015

Transcription

1 Australian Consumer Law what every RTO should know June 2015 Presented by Craig Yeung, Motus Legal Wendy Perry, VET Strategist, WPAA Head Workforce Planner, Workforce BluePrint 1

2 What are the most important areas of the Australian Consumer Law Act of 2010? Consumer Guarantees and Warrantees Misleading and Deceptive Conduct

3 What is Misleading and Deceptive Conduct? Misleading and Deceptive Conduct is a wide ranging concept. Not only what you say, but also what you don t say. Not whether you actually mislead or deceive, but whether conduct is likely to do so. Includes both oral and written communication.

4 What is a practical way to avoid deceptive or misleading conduct? The question that must be asked is what is the likely reaction to the conduct by ordinary reasonable members of the class to whom the conduct is directed?

5 Why should RTO s be concerned? The ACCC has recently launched investigations into at least 10 training providers around Australia. It is likely that this number will continue to grow in the near future. Key areas of concern: 1. Advertisements and promotional material 2. Salespeople and customer service staff

6 So why is advertising and promotion an area of concern? A significant part of a VET Provider s client acquisition strategy is marketing. You often use TV ads, radio ads, and use brochures or newspaper ads to promote your training organisations. Every point of contact you use that the public has the public see or hear has the potential to make a misleading statement.

7 Advertisements - the general thrust When dealing with advertisements, Courts acknowledge many people will only absorb the general thrust of advertisements. Many readers/viewers will not closely study all the details of your advertisement.

8 The Dominant Message When considering the general thrust of the advertisement, we must consider what the Dominant Message of the advertisement is.

9 The Dominant Message Cont d The Fine Print Advertisers often attempt to justify statements in advertisements with such phrases as conditions apply. This is unlikely to be enough to avoid a statement from being classified as misleading. There is no golden rule. Each advertisement that comes under scrutiny is judged on its particular facts.

10 Context is crucial Words in isolation Context

11 The Marketing Web The Marketing Web is a term often used by courts. It is used when referring to the point in time where members of a target audience are enticed into the marketing web.

12 The Marketing Web Cont d Disclaimers and Exclusion Clauses A well worded disclaimer or exclusion clause may help with claims of misleading and deceptive conduct. This has the potential to negate some claims to misleading and deceptive conduct when people otherwise would have been induced into the marketing web.

13 No intention is required One of the main reasons that you must be vigilant is that the law does not take into account whether you intended to mislead. A company that has acted honestly and taken reasonable care may still be liable.

14 No Actual Misleading Required The ACCC is not concerned only with punishing offenders, but also in protecting people from being misled in the first place. Because of this, they look at whether people are likely to be misled, not just whether they actually have.

15 What the ACCC will look at in these circumstances is: o A cross section of the people who come within the target audience the astute and gullible, the intelligent and not so intelligent. o In other words, they consider how ordinary, reasonable people would react. o If a significant number of people would likely form an erroneous conclusion then that is enough for a company to be liable.

16 Conduct of Sales and Service Staff Quite often when action is taken against companies for misleading and deceptive conduct, it is the actions of staff that is in question. Aggressive sales techniques, targeting people unlikely to understand what is being offered, and omitting information; or Implying a guarantee of success could leave you exposed to potential prosecution, liable for refunds, as well as compensation for consequential losses.

17 Examples of a misleading sales conversation The following is an actual transcript of a salesperson attempting to sell ink cartridges over the phone. The company that the sales person worked for was found liable for misleading and deceptive conduct.

18 Activity Enter in the question chat box things you may want to avoid saying to a client in a VET context. Think about various roles in the RTO: Sales Advertising Admin and Training staff Also put in there what may be a better way of saying it

19 Key points 1. Everyone in your RTO who talks to the public can leave you liable for miscommunication, deceptive conduct or consumer guarantees. 2. It s not just employees, it is contractors and agents that can leave you at risk. 3. Ask yourself does everyone in my RTO know about these laws, because ignorance or accidentally misleading is no defence in the eyes of the law.

20 What the ACCC is concerned with in the VET sector? The ACCC has been looking into: Incentives and inducements Guarantees of employment Misleading employment ads Targeting low socio-economic areas Selection processes

21 Incentives and inducements Where one part of a bundle of goods / services are is promoted as being free, but other parts are more highly priced, it is misleading to advertise the component as free. The Federal Government has recently announced reforms to the VET Industry regarding the offers of incentives. The reforms will stop training providers from offering incentives to students, such as laptops and ipads.

22 Guarantees of employment Does your organisation state that undertaking training with them will guarantee employment? An increased prospect of employment is not enough to justify this guarantee. A statement of this type is misleading to people who have no real prospects of completing training courses.

23 What is the penalty for posting misleading job ads? A Victorian training provider was recently fined $166,000 for making misleading statements regarding the availability of jobs. Instead of offering employment, applicants were directed to training courses at the end of interviews.

24 What is considered targeting low socio-economic areas Do you enrol students into programs who are incurring debts which they are not going to realise with that education? This may give rise to liability. Do you enrol people who do not have the financial capacity to repay a loan, or people who do not have the capability to complete the course, i.e. English as a second language.

25 Examples of other vulnerable groups: o The elderly o People with learning difficulties o People with poor English skills o People at home during the day in low socioeconomic areas

26 Selection Processes Successful action has been taken against training colleges in the past for misleading students about their selection processes. The most prominent examples of this are attributes required by applicants, selection processes, and appeal rights. This is primarily a concern for training providers who have work or other placements available.

27 Take a systematised approach Familiarise Approach Implementation Reviews

28 Take a systematised approach Familiarise Training and assessment of all of your staff in the ACL

29 Take a systematised approach Familiarise Approach Have clear policies and decide how you will answer your FAQ s before they come up. Develop a clear approach to how you will target and market to your customers taking into account the ACL

30 Take a systematised approach Familiarise Approach Implementation understanding applied to dealing with customers, enquiries, questions and tasks from induction and ongoing

31 Take a systematised approach Familiarise Approach Implementation Reviews the VET space changes rapidly so conduct regular reviews so your approach to the ACL stays current.

32 Connect Craig Yeung, Director Motus Legal Telephone Mobile Skype craigyeunglaw Web 32

33 Connect WPAA (all things VET) Workforce BluePrint: Wendy Perry wendy@workforceblueprint.com.au Keep up to date: LinkedIn: Facebook: Australian VET Leaders: ?gid= &trk=hb_side_g 33