CARD SURCHARGE PROHIBITION BILL 2024

Explanatory Memorandum &

Statement Of Compatibility With Human Rights

OUTLINE

The purpose of the Card Surcharge Prohibition Act 2024 is to prohibit merchants in Australia from imposing surcharges on transactions made using credit, debit, or charge cards. This legislation is designed to protect consumers from additional costs associated with card transactions, promote fairness in the marketplace, and enhance transparency in pricing.

NOTES ON PROVISIONS

Clause 1 of Schedule 1: This clause is the core of the Act, prohibiting merchants from imposing any surcharge on card transactions. It also renders any contractual term that requires or permits such surcharges void. The prohibition applies to all merchants, regardless of the size of their business or the sector in which they operate.

The intent behind this clause is to eliminate the practice of charging consumers additional fees for using cards, which often disproportionately affects those who rely on electronic payments. By prohibiting surcharges, the Act aims to ensure that consumers are not penalised for their choice of payment method.

Clause 2 of Schedule 1: This clause designates the Australian Competition and Consumer Commission (ACCC) as the authority responsible for enforcing the Act. The ACCC will have the power to investigate alleged breaches and take necessary action to ensure compliance. The clause empowers the ACCC to address non-compliance effectively and maintain the integrity of the prohibition.

It also outlines  the penalties for merchants who contravene the Act. Individuals may be fined up to $10,000 for each breach, while body corporates may face fines up to $50,000 per breach. Additionally, any surcharge imposed must be refunded to the customer. The penalties are intended to act as a deterrent against non-compliance and provide redress for affected consumers.

Clause 3 of Schedule 1: This clause addresses the transitional arrangements for contracts that predate the commencement of the Act. Any existing contractual terms that require or permit surcharges on card transactions will be rendered void from the commencement date. Merchants are required to review and amend their contracts within six months to ensure compliance with the new legislation. This provision ensures a smooth transition and gives businesses adequate time to adjust their practices.

It also mandates a review of the Act's operation within three years of its commencement. The Minister responsible for the Act will oversee the review, and a report will be tabled in Parliament within six months of the review's completion. This ensures ongoing oversight and allows for adjustments to the legislation if necessary, based on its impact and effectiveness.

Clause 1 of Schedule 2:  This Schedule amends the Competition and Consumer Act 2010 to include the prohibition on card surcharges. The inclusion of these amendments ensures consistency across related legislation and reinforces the prohibition in the broader context of consumer protection law

FINANCIAL IMPACT

Nil.

REGULATORY IMPACT STATEMENT

The Card Surcharge Prohibition Act 2024 will provide greater clarity and fairness in the marketplace by eliminating the practice of imposing surcharges on card transactions. The Act aligns with global trends towards protecting consumer rights and promoting transparent pricing. Businesses will be required to incorporate the cost of card processing into their overall pricing, thereby simplifying transactions and enhancing consumer trust.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

This bill is compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

HUMAN RIGHTS IMPLICATIONS

This Bill does not engage any of the applicable rights or freedoms.