Applying Consumer Law to Australian Charities?

Community sector peak body, Community Council for Australia (CCA) has called for a carefully staged application of Australian consumer law to the Not for Profit sector, in a draft submission to the federal government being considered by its members.

CCA CEO David Crosbie said the current fundraising regulations were “a dog’s breakfast with eight mismatched sets of requirements some dating back well over half a century and enforced in an ad-hoc way with little consideration of purpose or practice”.

The review of the Australian consumer law (ACL) began in March 2016 with the release of an Issues Paper following an agreement by consumer affairs ministers who set out the Terms of Reference.

Crosbie said ACL was a modern national set of regulations focused on fairness and consumer protection.

“If we could tweak the ACL to make it work for all Not for Profits engaged in fundraising and use the ACNC passport to qualify – it would be a massive improvement.”

The draft CCA submission said it “supports the application of Australian Consumer Law to the activities of all NFPs, but not without further consultation and refinement of both the regulations and the enforcement of those regulations”.

“There is already some legal contention about whether the current Australian Consumer Law applies to the activities of NFPs, particularly in relation to fundraising. CCA sees this uncertainty as counter-productive,” the draft submission said.

“CCA would argue that the current ACL only partly applies consumer protection issues in relation to fundraising in particular.

“Where NFPs are providing goods and services there is clearly a consumer and a provider that can be subject to consumer law. Where no exchange of goods takes place, but donations are made, there is less clarity around whether the donor is a consumer, and if so, what goods or services are being provided.

“The appropriate application of consumer law can only increase public trust and confidence in the NFP sector, and help support the vast majority of organisations that operate ethically and transparently in all their dealings with consumers and the broader community.”

The submission said the real benefit of applying the ACL to NFPs is that it is relatively modern legislation and is currently administered by the same authorities that administer fundraising regulations.

CCA said that the application of Australian consumer law to the NFP sector had the potential to reduce the regulatory burden imposed on all NFP organisations engaged in fundraising and other community based activities.

“It is this reduction in regulatory burden that informs the CCA position in support of the application of consumer law to all Not for Profit organisations.”

However CCA said it would be concerned if predetermined or set metrics around issues such as fundraising returns compared to costs were applied across the NFP sector.

“There is genuine potential for the application of ACL across all  Not for Profits to deliver real benefits to the community. Realising this potential will require further regulatory reform and further work and consultation with existing regulatory authorities, the ACNC and the NFP sector,” the submission said.

“Continuing with the current dog’s breakfast of duplicated and onerous regulations that applies to charitable fundraising is not an option, but the ACL offers a cleaner and more effective regulatory solution to concerns about fundraising and NFPs.

“Applying the current Australian Consumer Law without appropriate consultation and engagement is not without challenges as it has the potential to create more issues than it addresses.”

CCA said a staged approach drawing heavily on key players including the NFP sector itself, had the potential to deliver real improvements in regulatory controls and consumer confidence.

“This can be achieved more readily within the framework of the ACL rather than creating separate regulations for the different levels of charitable activities (fundraising, donations, provision of goods or services, in kind donations, etc.).”

The CCA submission is expected to be finalised and submitted to the review being undertaken by Consumer Affairs Australia and New Zealand (CAANZ) on behalf of the federal government next week.