11.12 There are a range of consumer protection laws that allow contracts to be challenged, including under the ACL and the National Consumer Credit Protection Act 2009 (Cth).
11.13 The ACL contains provisions under which contracts or contractual terms may be avoided. These include provisions in relation to misleading or deceptive conduct, unconscionable conduct, unfair contract terms and unsolicited consumer agreements.
11.14 Legal Aid Queensland submitted that the existing consumer law framework ‘effectively encourages people with a disability to participate in society to the fullest extent possible without being denied goods or services because it might be more difficult to ensure they are aware of their legal obligations’ and reflects the CRPD approach to capacity. That is, applying this to consumer law specifically, ‘a person may have the ability and understanding to engage with simple consumer products or transactions but may not have the capacity to understand or engage with more complex consumer products’.
11.15 The National Consumer Credit Protection Act 2009 (Cth) contains provisions on responsible lending conduct. These essentially require credit providers to assess the capacity of all consumers—not only consumers with disabilities—and assist them to understand consumer credit and financial products being offered.
11.16 Legal Aid Queensland submitted that the consumer credit provisions offer ‘adequate protections for people with disabilities without the need to adopt an overarching definition of capacity or disability in the legislation’—an approach, it said, that may serve as a useful model for other legislation in the Commonwealth jurisdiction.
11.17 For example, the National Association of Community Legal Centres (NACLC) submitted that, to improve protection for people with disability entering into contracts, companies and retailers should be subject to regulations requiring them to ‘ensure that consumers have the capacity to understand and fulfil the terms of contracts’. This may involve, for example, through asking a ‘mandatory list of questions to ensure that a consumer has understood the contract’.
11.18 Similarly, the Public Interest Advocacy Centre suggested that there is a need for ‘greater protection of people with disabilities in signing up for consumer contracts, particularly when this is done over the phone and through door-to-door sales’.
11.19 On the other hand, reforms that place undue focus on assessment of a person’s abilities, including by imposing positive obligations to make inquiries about the understanding consumers have of particular transactions, may end up disadvantaging some people because goods and services may not be made available to them.
11.20 In the Discussion Paper, the ALRC asked whether provisions similar to the responsible lending provisions of the National Consumer Credit Protection Act should apply to other consumer contracts. That is, should businesses have obligations to ensure that a consumer contract is suitable for the consumer, including making all reasonable inquiries and ensuring that the consumer fully understands the contract terms?
11.21 Some stakeholders considered that such obligations should underlie consumer contracts, but recognised concerns about the practical implications of law reform in this direction. KinCare Services, for example, stated that while it supported the notion that ‘all interactions with people with disability should take place under conditions where the customer’s decision-making capability is assured’, this could be costly and would increase market regulation. It suggested that the aims of the United Nations Convention on the Rights of Persons with Disabilities (CRPD) may be pursued more effectively through ‘the development of recommended standard contract clauses or improved availability of accessible communication tools’.
11.22 The Queenslanders with Disability Network (QDN) observed that the ‘potential for some people with disability to sign a contract that is unsuitable for their needs is high’ and welcomed ‘any attempt to protect consumers from financial commitments that they may not fully understand’. However, it expressed concern that reform in this area will ‘lead to an overly conservative approach in the offering of services to people with disability’.
11.23 NACLC submitted that, rather than any broader reform,
The introduction of very targeted and basic suitability requirements only in certain high-risk consumer contracts may be a preferable approach. This could, for example, apply to contracts such as purchasing a car without finance, high value phone contracts, and other high value consumer contracts and require a basic consideration of affordability and suitability.
11.24 Similarly, Legal Aid NSW considered that there is a need for reform in relation to ‘financial products, particularly insurance, as well as reforms that target particular product types and business models such as life insurance, funeral insurance and door to door and telephone sales’.
11.25 The ALRC considers that it would not be appropriate to make any recommendations in consumer protection law without further consideration of the possible ramifications for persons with disability who do not have decision-making vulnerabilities.
See, eg, Competition and Consumer Act 2010 (Cth) sch 2, ss 18, 20, 22–24; pt 3–2, div 2.
Legal Aid Qld, Submission 64.
National Consumer Credit Protection Act 2009 (Cth) ch 3.
Legal Aid Qld, Submission 64.
National Association of Community Legal Centres and Others, Submission 78.
Public Interest Advocacy Centre, Submission 41.
Australian Law Reform Commission, Equality, Capacity and Disability in Commonwealth Laws, Discussion Paper No 81 (2014) Question 11–1.
Illawarra Forum, Submission 124; KinCare Services, Submission 112.
UN Convention on the Rights of Persons with Disabilities, opened for signature 30 March 2007, 999 UNTS 3 (entered into force 3 May 2008).
KinCare Services, Submission 112.
Queenslanders with Disability Network, Submission 119.
Ibid. See also Vicdeaf, Submission 125.
National Association of Community Legal Centres, Submission 127.
Legal Aid NSW, Submission 137.