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Car finance warning
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The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking from Automotive Financial Services Pty Limited (AFS) in relation to one of its products known as the 'Credit Protection Waiver Program'.

AFS is a credit provider offering finance to consumers for the purchase of motor vehicles. From July 1997 to October 2001, AFS also offered consumers the Credit Protection Waiver Program (the Program), which allowed consumers who purchased the Program to apply to have their loan repayments waived if they became disabled or unemployed, or died.

ASIC came to the view that the Program was an insurance policy, and that purchasers were therefore entitled to greater consumer protection in relation to it. AFS did not accept that the Program was an insurance policy.

'The undertaking ensures that consumers who purchased the Program will be protected by having the same rights as consumers who deal with insurance companies, such as access to independent dispute resolution. It will also ensure consumers have the protections of the Insurance Contracts Act', ASIC's Executive Director of Consumer Protection, Mr Peter Kell said.

The Insurance Contracts Act prevent insurers from denying claims where this would be unfair, such as in cases where there are unusual terms in the insurance policy that have not been disclosed or where a particular term operates unfairly.

As a result of this undertaking, AFS has agreed to review all claims for waiver of repayments that were initially rejected. The claims will be reviewed by an independent consultant, who will assess them in accordance with the provisions of the Insurance Contracts Act.

Where AFS incorrectly rejected a claim for waiver of repayments, the independent consultant can direct AFS to pay the claim and, if appropriate, also pay compensation to the borrower (for example, if the car was repossessed). Where borrowers made repayments while AFS was assessing their claim, AFS has agreed to refund these payments to the borrower, together with interest, where it originally failed to do so.

In addition, AFS has agreed to pay claims where the borrower was not in permanent employment when they took out the Program. Under the Program, borrowers in this position were not entitled to claim and should not have been sold the Program in the first place. This part of the undertaking addresses this mis-selling.

'The offer of financial and insurance products to consumers purchasing cars on credit can be complicated, and has been a problem area in consumer sales. These products typically offer to cover repayments for a limited period if the borrower becomes unemployed, disabled or dies', Mr Kell said.

'ASIC is currently scrutinising the sale of financial products through car dealers, and where appropriate, will take action to ensure the interests of consumers are protected', he said.

ASIC acknowledges the cooperation of AFS throughout this investigation.

 
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New Privacy Cases
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The Federal Privacy Commissioner, Malcolm Crompton, has released case notes 10 and 11 regarding the use of personal information by Commonwealth agencies.

In L v Commonwealth Agency [2003] PrivCmrA 10 , the complainant raised concerns relating to the security of his personal information held by the agency. The complainant had asked for a password to be used to identify him when contacting the agency. However, on numerous occasions when he called the agency, he was not asked for his password. As a result of investigations by the Office, the agency made several changes to work practices and paid the complainant $250 compensation for breach of Information Privacy Principle 8.

In M v Commonwealth Agency [2003] PrivCmrA 11 , the complainant alleged that several inappropriate disclosures of his/her personal information had been made between two government agencies in relation to an accident claim and an employment opportunity. The Office found no breach of the Information Privacy Principles (IPPs) and found that Agency A had dealt adequately with the security issue under the IPPs.

 
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Spam Bill introduced
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The Commonwealth Government has introduced a Spam Bill. When passed it will ban the sending of unsolicited commercial electronic messages including email and SMS. It would also ban harvesting of email addresses.

The Australian Communications Authority (ACA) will become Australia’s spam watchdog . The draft legislation gives the ACA an investigative and regulatory role with the electronic marketing industry that was similar to its established role with the telecommunications industry.

Commercial electronic messages would only be able to be sent with the consent of the recipient, they must contain information about the originator and must incorporate an ‘unsubscribe’ facility. There are some exceptions, such as non- commercial organisations, including political, religious or charitable organisations, and factual material.

The ACA would also be given powers to:

enforce undertakings by originators of commercial messages
issue formal warnings and court injunctions
issue infringement notices and fines in lieu of court proceedings, and
seek court imposed penalties.

Provision had also been made for court orders to be issued and individuals fined up to $44,000 and companies up to $220,000 for a first offence

 
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Copyright update
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The AGD e-NEWS ON COPYRIGHT provides this useful summary of recent copyright cases.

The Panel Case
On 5 September 2003 the High Court heard arguments in order to determine whether Network Ten infringed the copyright in Channel Nine broadcasts when re-broadcasting extracts of Channel Nine broadcasts in its programme 'The Panel'. The Court has reserved its judgment in this matter.

Telstra v Desktop Marketing
On 20 June 2003 the High Court refused an application by Desktop Marketing Pty Ltd for special leave to appeal against the decision in Desktop Marketing Systems Pty Ltd v Telstra Corporation Limited [2002] FCAFC 112. In that case, the Full Court of the Federal Court held that copyright subsisted in Telstra's telephone directories. Therefore, as the law stands in Australia, copyright subsists in compilations which are original in the sense that 'the work was not copied, but originated from the putative author' and where 'the compiler has undertaken substantial labour or incurred substantial expense in collecting the information'.

Kabushiki Kaisha Sony Computer Entertainment v Stevens [2003] FCAFC 157
On 31 July 2003 the Full Court of the Federal Court handed down its decision in the appeal against the decision of Sackville J in Kabushiki Kaisha Sony Computer Entertainment v Stevens [2002] FCA 906.

Sony argued that 'mod chips' sold by the respondent, Mr Stevens, and inserted into PlayStation consoles constituted circumvention devices. The mod chips enabled copies of games, including illegitimate copies of games and copies legitimately purchased from other regions, to be played on the PlayStation consoles by overriding Sony's regional access codes and PlayStation Boot ROM's (the code readers).

The appeal turned on the definition of a 'technological protection measure' and whether Sony's access codes and code reader, or a combination of both, constituted a technological protection measure within the meaning of s 10(1) of the Act.

At first instance, Sackville J held that the measures employed by Sony did not constitute a 'technological protection measure' within the meaning of the Act as they were not designed to prevent or inhibit post-access infringement of copyright; they merely 'deterred' copyright infringement.

The Full Court overturned Sackville J's decision, holding that it was sufficient that Sony's devices inhibited infringement by making it impossible to use the unauthorised copies.

The Full Court held that the measures employed by Sony were technological protection measures, and therefore that the mod chips were circumvention devices in contravention of s 116A of the Copyright Act.

Mr Stevens has been ordered to stop selling the mod chips and to pay Sony's costs. Sony's claim for damages and additional damages were remitted to Sackville J for determination.

Universal Music Australia Pty Ltd v ACCC [2003] FCAFC 193
On 22 August 2003 the Full Federal Court handed down its decision in the appeal by Universal Music and Warner and their executives, against Hill J's decision in Australian Competition & Consumer Commission v Universal Music Australia Pty Limited [2001] FCA 1800. In that case Hill J found that the record companies breached ss 46 and 47 of the Trade Practices Act 1974 (Cth) when they ceased supplying particular retailers who were importing CD's from other countries and made it known that they may do the same to other retailers. Hill J imposed penalties of $450 000 on each record company, $45 000 each on three of the company executives and $50 000 on the fourth company executive.

The Full Court overturned Hill J's finding that the record companies had abused their market power in breach of s 46 of the Trade Practices Act. It held that neither Universal Music nor Warner held a 'substantial' degree of power in the market for wholesale recorded music in Australia.

However, the Full Court upheld Hill J's finding that the record companies engaged in exclusive dealing, in breach of s 47 of the Trade Practices Act. The contraventions consisted of refusing to supply particular retailers, and imposing conditions on supply to other retailers. The purpose of the contraventions was to discourage other retailers from selling imported CD's, which, if it had been achieved, would have had a substantial effect on the market. The fact that it was not achieved is no defence. The Court held that the four record company executives were accessories to these contraventions.

Despite a finding that the record companies had not breached s 46 of the Trade Practices Act, the Court increased the penalties imposed on the companies to $1 Million each. The Court also reduced the penalty imposed upon the fourth company executive to $45 000 to correct a factual error relating to the extent of the fourth executive's involvement.

The record companies and the four executives were ordered to pay one half of the ACCC's costs of the trial and of the appeals.

Australian Chinese Newspapers Pty Ltd v Melbourne Chinese Press Pty Ltd & Anor [2003] FCA 878

This case dealt with both copyright and trade marks in the logos of two competing Chinese language newspapers. The Court held that the applicant's logo was an artistic work, in which the respondent had infringed the copyright. The Court also held that the respondent infringed the applicant's trade mark.

Telstra Corporation Ltd v Royal & Sun Alliance Insurance Australia Ltd [2003] FCA 786

This case deals with Telstra's Yellow Pages Goggomobil advertising campaign. The Court held that an advertisement using the same type of car (the Goggomobil) and the same actor as Telstra's advertisement was not an infringement of copyright, but did breach ss 52 and 53(d) of the Trade Practices Act.

Chen v NSW Police Service [2003] FCA 589

This case was an appeal against the severity of a criminal sentence imposed for eight infringements under ss 132(1)(b) and 132(2A)(a) of the Copyright Act. The sentence was a five year good behaviour bond and a pecuniary penalty of $8000. The Court held that the sentence imposed was proper in light of the commercial nature of the offences, the range of penalties available, the financial means of the applicant and taking into account deterrence. The application was dismissed.

Universal Music Australia Pty Ltd v Miyamoto [2003] FCA 812

This case deals with infringement of copyright in sound recordings and breaches of the Trade Practices Act where the respondents were DJ's remixing sound recordings, and retailers selling these remixed CD's.

Universal Music & Ors v Hendy Petroleum & Ors [2003] FMCA 373

This case was a successful action for damages and punitive damages against a service station selling infringing CD's. It is the first case to have been brought under the amendments to the Copyright Act inserted by the Copyright Amendment (Parallel Importation) Act 2003 (Cth).

 
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Regulation of mortgage/finance brokers and property investment advisers.
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The Ministerial Council on Consumer Affairs (MCCA), recently met in Sydney
and unanimously agreed Queensland should chair a national working party to develop a single regulatory model for property investment advisors by March 2004.

A working party is already preparing a proposal which addresses
legislation needs for the growing mortgage/finance broker industry.

"A 2003 Australian Prudential Regulation Authority (APRA) report
reveals brokers account for more than $86 billion of current credit
transactions," Fair Trading says.

"Finance brokers arrange about 30 per cent of all mortgage loans and
this is expected to increase to about 50 per cent in the next three to
five years."

The Australian Competition and Consumer Commission is targeting misleading and deceptive conduct by property 'scammers'.

"The ACCC investigation is on four fronts: two-tier marketing; advice given by financial consultants, solicitors and valuers; unconscionable conduct by financial institutions; and real estate investment seminars", according to ACCC Chairman, Mr Graeme Samuel.

"The ACCC is particularly concerned that in a very hot property market, 'Mum and Dad' investors and superannuants are being pressured into joining property investment programs that promise massive wealth through property investment.

"But the 'investors' seem often to end up only with large debts and advice which they have little hope of utilising.

"The ACCC has directed extra resources to this area. Schemes are being currently investigated with a view to possible court action, principally for misleading and deceptive conduct.

 
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Changes to Queensland land tax
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The Land Tax Amendment Act 2003 implements the following 2003-04 State Budget measures:

the statutory deduction for residents increases from $200,000 to $220,000;
the minimum tax payable for a financial year increases from $100 to $350;
the exemption threshold for companies, trustees and absentees increases from $150,000 to $170,000;
the cut-off value of phasing-in rebate for companies, trustees and absentees extends from $215,000 to $235,000.

These changes took effect from the 2003-04 financial year. This means for individuals who reside in Australia, the taxable threshold is now $275,997 and for companies, trustees and absentees it is $170,000.

Land tax assessments for the 2003-04 financial year began issuing from 1 September 2003.

 
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Market Research Privacy Code
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The Privacy Commissioner has approved the Market and Social Research Privacy Code under section18BB of the Privacy Act 1988.

The Code was submitted by the Market Research Society of Australia (MRSA) and the Association of Market Research Organisations (AMRO). It took effect on 1 September 2003, and is intended to cover the market and social research industry.

The Market and Social Research Privacy Code encourages small market research companies to opt-in to the Privacy Act.