Fair Trading (Soliciting on Behalf of Charities) Amendment Bill

Hon Heather Roy, ACT Deputy Leader
Wednesday, December 9 2009

Hon Heather Roy speech to the First Reading of the Fair Trading (Soliciting on Behalf of Charities) Amendment Bill; Parliament, Wellington; Wednesday, December 9 2009.

It is always of great concern when consumers are being misled - and this is can be the case when a charity uses a third party to solicit donations on its behalf.

According to recent media reports, most individuals who donate money believe most of their donation will be used to fund the activities of the charity concerned.  What they do not realise is that a proportion of their donation can be used to pay for the third party's services.

While the use of third party collectors or agencies to solicit donations is neither illegal nor dishonest, it can be misleading.  Amy Adams' Bill attempts to improve the transparency of these transactions and ensure that people are aware of what happens to their donation.  Mrs Adams should be congratulated for this.

The legislation currently in place to ensure that consumers are not misled is the Fair Trading Act.  Amy Adams' Bill will add provisions to the Fair Trading Act's Unfair Practices section that will require charities to disclose the portion of the donation to be kept by the collector where that proportion is over 20 percent.  If the proportion retained is between 20 and 50 percent of the total donation, 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 of the total donation, the collector must disclose the percentage being retained to the nearest percentage point.

As Minister of Consumer Affairs I have initiated a project called ‘One Law' - a simplification programme for consumer law with the goal of principle-based consumer-supplier legislation that will see rationalisation of the 12 consumer laws that currently exist.

The Fair Trading Act is the pivotal piece of legislation in this project.  For this reason, the introduction of Mrs Adams' Fair Trading (Soliciting on Behalf of Charities) Amendment Bill is timely.  The long-term view is for an enhanced Fair Trading Act that incorporates as many of the aspects of other consumer legislation as possible, as well as additional enforcement tools that have been identified.

Mrs Adams and I have already discussed the interface between ‘One Law' and this Amendment Bill.  Their conclusion is that there is merit in the proposed Bill being absorbed into the ‘One Law' project and considered within the new approach to consumer law.

ACT supports the Fair Trading (Soliciting on Behalf of Charities) Amendment Bill to progress to Select Committee with a view to it becoming part of the ‘One Law' review after the public submission process is complete.

ACT commends Amy Adams on her work in ensuring that consumers are well-informed and that charitable giving is transparent.

ENDS

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