Businesses that make product and service recommendations will be forced to come clean on commissions, referral fees and kickbacks under new Better Business Reforms.
Minister for Innovation and Better Regulation Matt Kean said it would put buying power back in the hands of consumers and small businesses.
“Consumers are increasingly relying on referrals from third parties, including agents and price comparison websites when deciding what to buy,” Mr Kean said.
“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 Minister Kean’s Better Business Reforms, the biggest shakeup of NSW consumer laws in three decades, which are designed to get the economy working for shoppers, not shonks.
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 Mr 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.”
Mr Kean will introduce the Better Business Reforms into Parliament later this month.