General policy statement

This Bill aims to provide increased transparency and public accountability for professional third party collectors who are in the business of collecting funds on behalf of registered charities.

Public accountability is an important part of the credibility that enables people to donate with confidence. Given the recent negative publicity, disclosure may restore confidence—enabling donations to continue where the retained amount is appropriate.

This Bill aims to improve transparency and disclosure to the public. There are no current rules on what has to be disclosed except that no misleading or deceptive statements may be made.

The Bill requires professional third party collectors to disclose to potential donators that a portion of the donation will be retained by the collector. This only applies if the proportion retained is more than 20 percent.

If the proportion retained is between 20 and 50 percent of the total donation then the collector must simply disclose that a portion is being withheld by them, but does not have to disclose the amount. If the proportion retained is more than 50 percent then the collector must disclose the percentage being retained, to the nearest percentage point.

The cost of compliance is assessed as minor, however it is noted that as a consequence of the changes in this Bill some telemarketers may not be prepared to continue to do this work for charities. That outcome is assessed as being outweighed by the potential for large scale rip-offs of unsuspecting consumers.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 provides for the Bill’s commencement date.

Clause 3 indicates that the principal Act being amended is the Fair Trading Act 1986.

Clause 4 introduces sections 26A, 26B, and 26C, which require all third party collectors for charitable entities to disclose if a portion of the donation will be paid to the collector rather than going to the charitable entity.