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Privacy case notes

The Federal Privacy Commissioner has published case notes 1 - 7, 2005.

The cases relate to excessive charges for access to records, a disputed credit file listing, inappropriate disclosure of personal information and a failure to appropriately secure documents when in transit.

The full decisions are worth reading to understand the Commissioner's approach to complaints in different fact circumstances and how they are resolved.

In A v Insurer [2005] PrivCmrA 1 (http://www.privacy.gov.au/act/casenotes/ccn1_05.html), the complainant asked an Insurer for copies of all his personal information that it held. After assessing the documents the Insurer quoted an access charge of approximately $600 to cover its costs for retrieving and copying approximately 500 pages of documents. The complainant paid the charge and the Insurer provided the quoted documents, but withheld certain documents. The complainant alleged that the Insurer failed to provide reasons for denying access to the withheld documents.

The Commissioner decided that:

* that the access charge was not excessive; and

* that the Insurer had breached National Privacy Principle 6.7 by not providing reasons for denying access to certain documents.

In B v Credit Provider [2005] PrivCmrA 2 (http://www.privacy.gov.au/act/casenotes/ccn2_05.html), the complainant received a demand in January 2003 for payment of outstanding telephone service charges covering a 12 month period up to September 1996. The complainant claimed an invoice had been paid in April 1996 and disputed owing further amounts.

In March 2003 the respondent listed a payment default in the amount of the debt on the complainant's consumer credit information file, held by a credit reporting agency.

Following an investigation by the Commissioner, the credit reporting agency advised the respondent about the prohibition against listing statute barred debts, and the payment default listing was removed from the complainant's consumer credit information file.

In C v Commonwealth Agency [2005] PrivCmrA 3 (http://www.privacy.gov.au/act/casenotes/ccn3_05.html), the complainant and his wife were employees of the respondent. The complainant's wife was the applicant in proceedings against the respondent in the Administrative Appeals Tribunal for compensation in relation to a health and safety issue. During proceedings the complainant's wife submitted to the Tribunal that she was not able to afford certain medical expenses. In reply, the respondent obtained information about the complainant's income from its payroll department which it submitted to the Tribunal as evidence of the applicant's financial standing.

The complainant argued that the respondent was not permitted to disclose his personal information to the respondent's legal counsel in relation to a matter which did not concern the complainant.

The Commissioner decided under section 41(1)(a) of the Act not to investigate the matter further on the grounds that the disclosure of personal information was authorised by law and therefore did not breach National Privacy Principle 2.1.

In D v Health Service Provider; E v Health Service Provider; F v Health Service Provider; G v Health Service Provider [2005] PrivCmrA 4 (http://www.privacy.gov.au/act/casenotes/ccn4_05.html), the Commissioner has published four case notes on four finalised complaints addressing a common issue, namely excessive charges for providing access. In 3 of the 4 cases the access fees were reduced.

In H v Commonwealth Agency [2005] PrivCmrA 5 (http://www.privacy.gov.au/act/casenotes/ccn5_05.html), the complainant, a customer of a Commonwealth government agency, made a privacy complaint to that Commonwealth government agency about an officer of the agency improperly browsing her personal information. An investigation was conducted by the agency and as a result of the investigation the officer's employment with the agency was terminated.

The Commissioner was of the opinion that based on the information supplied by the complainant the agency had dealt appropriately with the issue by terminating the officer's employment and offering the complainant a written apology.

In I v Commonwealth Agency [2005] PrivCmrA 6 (http://www.privacy.gov.au/act/casenotes/ccn6_05.html), the complainant alleged that a federal court had disclosed the complainant's name and address to a third party. Following an investigation, the Commissioner decided that there was no jurisdiction to further investigate the allegation because the alleged disclosure involved information that was recorded in a court order and the alleged disclosure occurred in the course of the judicial functions and activities of the agency therefore it was not an act done, or practice engaged in, in respect of an administrative matter.

In J v Superannuation Provider [2005] PrivCmrA 7 (http://www.privacy.gov.au/act/casenotes/ccn7_05.html), the complainant alleged that records relating to his superannuation disability claim were found on a public thoroughfare. The records included reports about covert surveillance undertaken by the superannuation provider as part of the claim assessment.

The Commissioner found there was a breach of National Privacy Principle 4.1 and then moved to conciliate a resolution of the matter. The parties agreed to resolution that included a formal written apology and a payment of compensation of $3500 for loss or damage including legal expenses and hurt and embarrassment. The superannuation provider also advised the Commissioner that it had changed its distribution policy to require that in future all couriered documents be signed for personally.

February 27, 2005 in Privacy | Permalink | Comments (0) | TrackBack

More misleading advertising

Following on from my post last week on advertising, comes news of action by ASIC:

  ASIC has accepted an enforceable undertaking from Mortgage Point Pty Ltd (Mortgage Point) in response to its concerns that since October 2001, Mortgage Point, a Melbourne-based mortgage orginator, made potentially misleading and deceptive statements in its promotional brochures.  Mortgage Point published various brochures in which it claimed to offer 'independent', 'impartial' and 'unbiased' advice about mortgages. The brochures stated that Mortgage Point:

  • offers an impartial and unbiased loan advisory service;
  • gives free unbiased advice;
  • acts as an independent mortgage broker; and
  • provides independent advice.

ASIC formed the view that the claims were misleading and deceptive because Mortgage Point and its agents:

  • only receive commission from, and provide advice in relation to lenders on its panel; and
  • do not provide advice in relation to lenders who are not on its panel.

As part of the enforceable undertaking, which is provided under the consumer protection provisions of the ASIC Act, Mortgage Point has given an undertaking that:

  • it will not make any of the above claims or use the words 'unbiased', 'impartial' or 'independent' in any future advertising or promotional material;
  • it will provide compensation to any customer who has suffered loss as a result of relying on the claims Mortgage Point is 'unbiased', 'impartial' or 'independent';
  • it will implement a compliance program; and
  • it will make a financial contribution towards consumer education or similar programs. 

February 25, 2005 in Financial Services | Permalink | Comments (0) | TrackBack

FSR review

Chris Pearce, the Parliamentary Secretary to the Treasurer has announced that he is " working on a series of proposed refinements that I believe will improve the operation of the legislation.

These refinements will be based on the feedback I have received from industry   and consumer representatives, as well as from Treasury, ASIC and FSAC...

It is particularly important to ensure that any proposed changes reduce compliance   costs for industry rather than impose further burdens."

"These areas include, by way of example, the application of the regime to telephone   transactions, whether it can be streamlined to reduce costs in relation to ongoing   advisory relationships and the extent to which it should apply to particular   financial products or in particular situations."

 

February 24, 2005 in Financial Services | Permalink | Comments (0) | TrackBack

Debentures

ASIC has released the results of an intensive surveillance of high-yield debentures that was conducted in late 2004.

ASIC examined the prospectuses and selected advertising for debentures issued by 11 companies that were offering high yields, such as interest rates that were four per cent per annum above bank term-deposit rates.

As a result of its surveillance, ASIC prevented four offers that failed to disclose information relevant to the fundraising from proceeding until the defects had been addressed. One of the four prospectuses required a final stop order, which permanently stopped the offer from proceeding.

ASIC also stopped two misleading advertising campaigns, and required companies to improve the information provided to investors in two other cases.

ASIC identified four common concerns that were especially prevalent, namely:

  • aggressive or misleading advertising
  • poor disclosure about property developments
  • related-party transactions, and
  • bad and doubtful debts.

February 18, 2005 in Financial Services | Permalink | Comments (0) | TrackBack

Super fund choice

Employers affected by the choice of fund provisions will be required to give a standard choice form to their existing employees before 29 July 2005, and within 28 days of commencing employment for new employees.

Employers will have two months to action employees' choices and start paying contributions into the choice fund, according to minutes of the ATO Business System Working Group meeting held in Sydney on 1 December 2004

Employees can choose a new complying fund; stay in the existing employer fund; or not make a choice, resulting in contributions going to the default fund identified in the standard choice form.

Failure to meet these obligations may attract the Super Guarantee charge. Employees can change funds once every 12 months (more often if employer allows it) and do not have to use the Standard Choice Form.

The ATO says employers will need to keep records for five years to show the choice requirements have been met and any additional documentation provided. However, the ATO notes there is no need to send standard choice forms to the ATO or the fund.

The Regulations for Choice of Fund are not expected to be finalised until March 2005. The regulations will cover the content of the standard choice form, information an employee choosing a fund must give their employer, the minimum level of life insurance to be offered by the default fund, exemptions where a trustee may provide benefits to employers.

February 18, 2005 in Business Planning | Permalink | Comments (0) | TrackBack

Money laundering

New international anti-money laundering standards will oblige Australia to expand customer due diligence requirements for financial institutions and extend anti-money laundering obligations to non-financial businesses and professions such as real estate agents, dealers in precious metals and stones, accountants, trust and company service providers, legal professionals and notaries.

Existing account identification requirements will be strengthened and better record keeping will be required.

A new Bill is expected to be introduced into Parliament this year.

More (PDF)

February 15, 2005 in Anti-money laundering, Current Affairs, Financial Services | Permalink | Comments (0) | TrackBack

Changes to shareholder rights

The Parliamentary Secretary to the Treasurer, the Hon Chris Pearce MP says draft legislation released on 7 February will make it easier for shareholders to participate in corporate governance processes, while "striking a more appropriate balance between the rights of different groups of shareholders".

He said the legislation would remove the "100-member rule" which currently requires companies to hold special general meetings at the request of only 100 shareholders. A minimum of five per cent of total voting shares would be required to requisition a special general meeting.

Mr Pearce said a number of new proposals had been developed to enhance shareholders' capacity to participate in scheduled meetings.

These proposals include:

  • making it easier for minority shareholders to place resolutions on the agenda of scheduled company meetings
  • requiring companies to distribute members' statements along with notices of meetings
  • requiring proxy holders to vote in accordance with shareholder instructions. This would improve shareholder confidence in proxy voting by preventing the questionable practice of  "cherry-picking" proxies, whereby proxy holders lodge votes that accord with their own views while withholding contrary votes.

The proposals are contained in the Corporations Amendment Bill (No2) 2005. Submissions on the draft Bill will be accepted until 1 April 2005.

February 8, 2005 in Corporate Governance | Permalink | Comments (0) | TrackBack

Commonwealth Parliament resumes

Parliament resumes next Tuesday 8 February 2005.

Sitting dates for the Autumn sittings are as follows (all dates inclusive):            

- 8 to 10 February 2005
- 14 to 17 February 2005 (House only - further sitting day on 18 February 2005, if required)
- 7 to 10 March 2005
- 14 to 17 March 2005.            

Budget Night this year is on 10 May 2005.

February 4, 2005 in Current Affairs | Permalink | Comments (0) | TrackBack

New price fixing penalties proposed

The Treasurer has announced that the Australian Government will amend the Trade Practices Act 1974 to introduce criminal penalties for serious cartel conduct.

The proposed criminal cartel offence will prohibit a person from making or giving effect to a contract, arrangement or understanding between competitors that contains a provision to fix prices, restrict output, divide markets or rig bids, where the contract, arrangement or understanding is made or given effect to with the intention of dishonestly obtaining a gain from customers who fall victim to the cartel.

Serious cartel conduct results in the deception of customers when purchasing goods or services, unaware that the price and supply of those goods and services were determined by collusion, rather than competition.

To ensure the offence targets serious cartel conduct that causes large scale or significant economic harm, and that minor breaches are dealt with through civil rather than criminal proceedings, the DPP and the ACCC will enter into a formal, publicly available Memorandum of Understanding (MOU) establishing procedures for the investigation of the cartel offence and the circumstances in which the ACCC will refer a case to the DPP for prosecution. The MOU will also specify that in making an independent determination as to whether to prosecute a particular matter, the DPP will consider factors such as the impact of the cartel and the scale of detriment caused to consumers and the public, and previous admissions to or convictions for cartel conduct.

The ACCC will issue guidelines, prepared in consultation with the DPP, to outline the factors that will inform any decision to pursue a criminal investigation.

Appropriate protection for whistleblowers that come forward to uncover cartel conduct will be provided though a clear and certain immunity policy. Guidelines will be published setting out the conditions for immunity to be granted by the DPP, upon the advice of the ACCC. The respective roles and responsibilities of the ACCC and the DPP will also be defined in the MOU.

The maximum penalties for the offence will be a term of imprisonment of five years and a fine of $220,000 for individuals and a fine for corporations that is the greater of $10 million or three times the value of the benefit from the cartel, or where the value cannot be determined, 10 per cent of annual turnover.

February 3, 2005 in Trade Practices | Permalink | Comments (0) | TrackBack

Flight Centre: Misleading advertising

Basic trade practices law has again had significant commercial consequences for an advertiser.

Flight Centre Limited will stop using its 'Lowest Airfares Guaranteed' slogan after the ACCC investigated the slogan claims.

The ACCC has accepted court-enforceable undertakings from Flight Centre, one of Australia's largest travel agencies, which also includes extensive corrective advertising.

"The ACCC believed the slogan indicated to customers that Flight Centre's airfares were guaranteed to be the lowest available, when this was not always so", ACCC Chairman, Mr Graeme Samuel said. "The ACCC received a number of customer complaints and considered the results of its own limited airfares survey comparing prices from Flight Centre and competing agencies".

In response, Flight Centre agreed to stop using the slogan for five years in all its marketing material, including its newspaper and television advertisements, its website and in-store advertisements.

It acknowledged in the undertaking that some consumers may have misunderstood the meaning of the slogan.

The ACCC also raised concerns with Flight Centre about a claim that it used its 'Global Buying Power' to get better deals on airfares than the deals generally available to other travel agents. The ACCC was concerned that Flight Centre does not in fact have such power as it does not generally buy airfares in bulk, but rather books airfares for customers on an individual basis.

Flight Centre will not use the 'Global Buying Power' representation in the future without giving prior notice to the ACCC. The notice will allow the ACCC to investigate if the claim is in fact accurate before it is used by Flight Centre.

Flight Centre agreed to a number of corrective steps aimed at ensuring that its customers are disabused of any misunderstanding about the meaning of either the 'Lowest Airfares Guaranteed' slogan or 'Global Buying Power' representation. It will:

  • publish a total of 44 corrective notices in 11 major newspapers, including The Daily Telegraph, Sydney Morning Herald and The Australian, to be run over four weeks, and
  • display A-3 sized corrective notices in the front window of each of its 500 plus retail outlets continuously for four weeks.

February 3, 2005 in Trade Practices | Permalink | Comments (0) | TrackBack