NDIS Providers in the Spotlight: ACCC Flags Consumer Law Risks
The Australian Competition and Consumer Commission (ACCC) has recently released a report entitled “NDIS report: ACCC observations of consumer issues in the NDIS” (the Report). The Report highlights a range of consumer protection concerns emerging across the National Disability Insurance Scheme (NDIS).
While the report recognises that many providers operate responsibly and play a critical role in delivering services to participants, it also identifies practices that may expose providers to a risk of non-compliance under the Australian Consumer Law (ACL).
For NDIS providers, the report is a timely reminder that operating in the NDIS sector does not reduce the application of consumer protection laws. The ACCC’s report reinforces that NDIS providers are subject to the same consumer law obligations as any other business, including obligations not to engage in misleading or deceptive conduct and to comply with consumer guarantees.
Misleading marketing practices
One of the most significant concerns relates to misleading representations about NDIS funding and provider status.
The ACCC notes that some businesses promote goods or services as:
- “NDIS approved”;
- “NDIS endorsed”; or
- “automatically eligible for NDIS funding”.
In reality, the NDIS does not approve individual products or services, and funding decisions are assessed on a participant-by-participant basis.
Marketing that implies guaranteed funding or endorsement by the NDIS may therefore risk breaching the ACL on the basis that it is misleading and deceptive conduct.
Consumer guarantees issues
Consumer guarantees are automatic, legally protected rights that consumers have when buying products and services in Australia. Generally, these consumer guarantees are unable to be excluded.
The Report identifies situations where participants have reported being unable to access the remedies set out in the ACL where:
- support equipment is faulty or does not meet the agreed specifications; and
- support services are not carried out with due skill and care.
The Report reminds NDIS providers that they must not make statements or engage in conduct that suggests that a participant is not entitled to a remedy under the consumer guarantees in the ACL.
Billing and charging concerns
The ACCC has also identified complaints relating to billing practices, including providers:
- charging for services that were not delivered;
- charging higher prices to NDIS participants compared with other customers; and
- billing for services which is inconsistent with what was agreed with the participant.
These issues can raise both consumer law concerns and regulatory risks under the NDIS framework.
Contract terms and participant protections
The ACL bans ‘unfair contract terms’ in standard form contracts such as services agreements. The Report identifies concerns about service agreements that may disadvantage participants, including:
- unclear cancellation policies;
- restrictive contractual terms; and
- arrangements that participants may not fully understand.
Given that many NDIS participants are considered vulnerable consumers, the ACCC has emphasised the importance of clear and fair contract terms.
Penalties
Providers risk high penalties for breaching the ACL.
The maximum fine for a breach of the ACL is the greater of:
- $50,000,000;
- 3 times the value of the ‘reasonably attributable’ benefit obtained, if the Court can determine this; or
- 30% of the corporation’s adjusted turnover during the breach turnover period, if the Court cannot determine the value of the ‘reasonably attributable’ benefit.
What providers should take from the report
The Report makes it clear that consumer protection laws apply squarely to NDIS transactions, and providers should ensure that their business practices reflect this reality.
It is imperative that NDIS providers ensure that their practices align with the ACL.
Our Business Law Team is currently assisting NDIS providers by:
- reviewing marketing and advertising materials;
- reviewing and drafting compliant service agreements with participants;
- reviewing and advising on billing and invoicing practices to ensure compliance with the ACL; and
- conducting staff training regarding ACL compliance.
If you would like to assistance reviewing your organisation’s practices or updating your service agreements, please contact our Business Law Team today.
