The Commonwealth Government has released a report on the review of the Franchising Code of Conduct.
The Franchising Code aims to strike a balance in relation to disclosure by franchisors and the rights of franchisees.
The report contains a total of 18 recommendations to Government.
The recommendations in relation to disclosure include a requirement for a franchisor to disclose the rights of the franchisor and franchisee to conduct and benefit from online sales, including any ability of the franchisor to conduct online sales.
There are recommendations relating to an obligation to act in good faith being inserted into the Code, and the introduction of civil pecuniary penalties for breaches of the Code.
There are also a number of recommendations aimed at addressing specific problematic areas, for example, the issue of franchisor failure.
No recommendation has been made that franchisees receive an exit payment or goodwill payment at the end of the term of their franchise agreement. However, a recommendation has been made that any restraint of trade clauses in the franchise agreement which prevent the franchisee from carrying on a similar business in competition with the franchisor, are not enforceable by the franchisor against the franchisee in certain circumstances.
The Government has not yet indicated its response to the recommendations.
The Consumer Credit Legislation Amendment (Enhancements) Act 2012 amended the National Credit Act (including the National Credit Code) to introduce a number of reforms to the regulation of reverse mortgages.
National Consumer Credit Protection Amendment Regulation 2013 (No. 2) was registered on 21 May 2013.
From 22 May 2013 credit licensees must use the prescribed method to make projections of their home equity (ASIC’s reverse mortgage calculator) and to give those projections to consumers in the prescribed way.
From 1 June 2013 the Regulation:
The Attorney-General’s Department has released a consultation paper seeking views on possible enhancements to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) customer due diligence (CDD) regime.
The AML/CTF Act and Rules set a minimum baseline for reporting entities to know their customers and beneficial owners.
Potential reforms discussed in the paper include:
Currently reporting entities must have in place AML/CTF programs to identify, mitigate and manage risks that a designated service it provides may involve or facilitate money laundering or terrorism financing. Before providing a service, reporting entities are required to have appropriate CDD programs in place to:
ASIC has released Consultation Paper 207 Charitable investment fundraisers (CP 207) proposing reforms for charities (including religious charitable development funds (RCDFs)) that raise investment funds.
The proposals do not affect fundraising by charities in the form of donations.
The Consultation Paper proposes to either:
ASIC is proposing that in order to fundraise charities must hold 75% of their assets in assets that directly relate to their charitable purpose; and where the fund is offered to retail clients:
ASIC has chosen 28 June 2014 for Option A because it aligns with the date that APRA proposes in its discussion paper issued 19 April 2013 as the date from which amendments to current exemptions under the Banking Act for RCDFs would become effective.Background
The exemptions in Option B would only be of assistance to a debenture issuer if it obtained any exemption required from the Banking Act. APRA has proposed for discussion that from 28 June 2014 it will no longer give an exemption for RCDFs, a number of which are also charitable investment fundraisers, where the RCDF accepts retail investments.
ASIC proposes to roll over relief that is currently available to schools for school enrolment deposits without amending the terms of the relief.
If Option B is adopted the amendments to the existing exemptions will be phased in over several years and be subject to a transition period.
The Submission by the Credit Ombudsman Service Limited (COSL) on the Draft Credit Reporting Code has expressed concern about ‘credit repair’ agencies which offer to ‘fix’ consumer’s credit records for a minimum average fee of around $1,000 per listing when in fact access to credit records and correction of credit records is free of charge.
COSL has proposed that a credit reporting bureau (CRB) or the credit provider (CP) should not deal with any agent of a consumer who is charging a fee to the consumer for access/repairing their credit record.
The agencies obtain the authority of the consumer to access the relevant credit records and then make a complaint to the CRB or the credit provider that certain credit entries are incorrect and should be removed.
The credit agencies often also approach the various Ombudsmen, whose services are available to consumers free of charge, to have the entries removed. About a third of all complaints COSL receives about alleged incorrectly listed credit defaults are from credit repair agents.
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