The Australian Competition Tribunal has granted authorisation for a new consumer code for retailers of ‘new energy tech’ products, varying the conditions from those previously imposed by the ACCC in relation to “buy now pay later” (BNPL) finance providers.
The New Energy Tech Consumer Code sets minimum standards of good practice and consumer protection in relation to solar generation systems, energy storage systems, electrical vehicle charging and other emerging energy products and services. It applies to all aspects of customers’ interactions with participating retailers, including marketing, sales, finance and payments, warranties and complaints handling processes.
In the ACCC’s authorisation decision in December 2019, the ACCC imposed conditions that strengthened consumer protection requirements for BNPL providers, and clarified the prohibition on code signatories offering BNPL finance in unsolicited sales of new energy products. The authorisation also included additional reporting conditions.
Flexigroup, a BNPL provider, sought a review of the ACCC's determination by the Tribunal, seeking to have the ACCC’s conditions relating to BNPL finance replaced with less stringent consumer protection requirements and removal of the prohibition on BNPL finance being offered with unsolicited sales of new energy tech products.
The Tribunal varied the conditions of authorisation in relation to the requirements that BNPL finance providers must meet in order for signatories to offer such finance arrangements under the code, and imposed a condition removing the prohibition on BNPL finance being offered in unsolicited sales of new energy tech.
The varied conditions also remove the code administrators’ ability to impose mandatory standards on signatories that would apply to future new energy tech products and services.
“The New Energy Tech Code aims to provide consumers with added protections and more information to help them make better informed decisions around what can be complex, expensive purchases,” ACCC Commissioner Stephen Ridgeway said
“The ACCC considered that the option to choose “buy now pay later” finance was valued by consumers but that, based on the submissions made to the ACCC, greater protections around responsible finance and a prohibition on “buy now pay later” finance being offered in unsolicited sales of new energy tech were appropriate to reduce the risk of harm to consumers from entering into unsuitable or unaffordable finance arrangements,” Mr Ridgeway said.
After conducting a hearing, the Tribunal concluded that the detailed evidence before it did not establish that the provision of BNPL finance with new energy tech products generated material consumer harm. It also found that there was substantial detriment in restricting BNPL finance options to consumers and that BNPL was a significant and popular form of finance that provided economic benefits.
The Tribunal also considered that any harm which may arise by unlawful selling of these products could be reduced by the consumer protections contained in the code.
The Tribunal further noted that ASIC has been actively considering whether the National Consumer Credit laws should be extended to cover BNPL finance and that ASIC’s review of the sector will have more evidence before it to consider whether such an extension is warranted.
A summary of the Tribunal’s Determination can be found here: Tribunal Summary of Determination.
Background
On 30 April 2019, the Clean Energy Council, the Australian Energy Council, the Smart Energy Council and Energy Consumers Australia lodged an application on behalf of themselves and future signatory providers of new energy tech for authorisation for the Consumer Code.
Flexigroup was a participant in the ACCC’s public consultation in respect of the application for authorisation.
On 5 December 2019 the ACCC decided to grant authorisation subject to a number of conditions to enable the public benefits of the Consumer Code to be more fully realised, reduce the likely detriments and to help assess the ongoing operation of the Consumer Code.
Flexigroup Limited applied to the Tribunal for review under section 101 of the Competition and Consumer Act 2010 of the ACCC’s determination.
This matter was heard by the Tribunal between 9 and 12 June 2020. The role of the ACCC in this review was to assist the Tribunal.