New reforms force companies to declare kickbacks

New reforms will compel businesses to declare kickbacks they receive for product and service recommendations.

The NSW Government wants to introduce these Better Business Reforms in order to give power back to consumers and small businesses.

Businesses that make product and service recommendations will be forced to come clean on commissions, referral fees and kickbacks.

“Consumers are increasingly relying on referrals from third parties, including agents and price comparison websites when deciding what to buy,” said Minister for Innovation and Better Regulation Matt Kean.

“Not everyone knows that these referral businesses often receive a financial incentive for recommending specific products or services.

“I want to see people getting ahead because they offer the best products and services, not the biggest commission or kickback. Under my reforms, referral businesses will need to be clear up front about any commissions they’re receiving.”

A recent report by the Australian Competition and Consumer Commission highlighted problems in the electricity sector and called for a crackdown on comparison websites to make recommendations based on what is best for the customer, not business bottom lines.

The proposal is part of Kean’s Better Business Reforms, the biggest shake-up of NSW consumer laws in three decades, which are designed to get the economy working for shoppers.

The reforms will also help create greater transparency around extended warranties. Consumers may not know their rights are sometimes already protected by the Australian Consumer Law and buying an extended warranty may be a waste of their hard-earned cash.

“Some shonky businesses are ripping NSW families off by selling them warranties that actually give consumers no extra protection. It’s a total rort,” said Kean.

“My Better Business Reforms are all about giving consumers the tools they need to make informed decisions and helping good businesses compete.

“These reforms are a win-win: empowering consumers and helping small businesses that put consumers first.”

Kean will introduce the Better Business Reforms into parliament later this month.

Image credit: ©iStockphoto.com/David Gunn

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