NDIS Providers need to be mindful of Australian Consumer Law
The Australian Competition and Consumer Commission (ACCC) has announced it is prioritising enforcement action against National Disability Insurance Scheme (NDIS) providers that breach the Australian Consumer Law (ACL). The ACCC is particularly concerned with misleading advertising practices by NDIS providers and will closely monitor and investigate those who engage in such conduct.
What form of NDIS advertising could be misleading?
The ACCC is particularly concerned with advertising which falsely represents the goods or services of a NDIS provider as either being affiliated, approved or completely covered by the scheme when they are not.
Some examples of NDIS advertising which could be considered misleading or deceptive under the ACL include:
- advertising that suggests NDIS funds cover “all inclusive” holidays
- meal delivery services suggesting the cost of meals is covered by the NDIS
- advertising that provides instructions on how to use NDIS funding codes to cover costs of recreational services that are not covered by the NDIS scheme – for example, going to the movies or a theme park
noting that these goods or services are not covered by NDIS funding.
Representations which could be considered false or misleading under the ACL include:
- advertising that suggests a business is affiliated or endorsed by the NDIS, by using NDIS in its business name or service description (e.g., ‘NDIS therapies’)
- the use of the words ‘NDIS approved’.
These representations falsely convey to consumers that providers are affiliated with the NDIS, or that further goods or services are approved when they are not.
Investigations into NDIS providers’ advertising practices
The ACCC has advised that it is actively investigating multiple NDIS providers for breaches of the ACL and anticipates taking legal action in the near future.
While the ACCC’s focus on the NDIS space may be more recent, this is not the first time it has taken action against businesses for similar misleading advertising practices.
Last year, the ACCC was successful in its action against Employsure Pty Ltd for false and misleading representations in its online ads that it was, or was affiliated with, a government agency.
In 2014, the ACCC was successful in its action against Zen Telecom Pty Ltd for making false and misleading representations that it was acting on behalf of Telstra or other associated companies, when in fact it had no connection to Telstra.
NDIS providers who face action from the ACCC for breaching consumer law could incur significant civil penalties, including financial penalties of the greater of either $50 million, or three times the value derived from the relevant breach, or where the value cannot be determined, 30 per cent of the company’s turnover during the contravening period.
Navigating the law and advertising
The test applied in determining whether representations are false or misleading is objectively determined by whether ordinary or reasonable individuals are likely to be affected by the conduct, for example, NDIS participants or their families. As this can be subjective and broad, it is important that all NDIS providers are vigilant and carefully consider all marketing and advertising materials to ensure they are compliant with the ACL. Any statements that are made should be factually accurate and clear, to not mislead or falsely represent NDIS participants or those seeking such services on behalf of participants. It is important to keep in mind that this cohort may be a particularly vulnerable class of people.
Drawing up a Service Agreement
If you plan to provide NDIS services, it is only mandatory to have a written service agreement where you provide Specialist Disability Accommodation support. However, it is generally recommended (and best practice) for all providers to have a service agreement, as you may only charge participants for charges they have agreed to. For example, this may include cancellation fees and provider travel. The NDIS Pricing Arrangements and Price Limits (Price Guide) outlines these items.
A service agreement is useful as it will provide more certainty and protection, especially if a dispute arises. The agreement should also outline key terms, including:
- the type of services that you offer and the prices;
- the expectations of the participants and you as a service provider; and
- the rights of participants under the Australian Consumer Law.
The written agreement should clearly state the goods or services that the NDIS provider will provide the participant and how, when and where. Some information you need to include are:
the qualification of the people delivering the services (e.g. occupational therapist);
a description of the services (e.g. report writing and home assessments);
when and how often the services will be provided (e.g. every Tuesday at 3 pm);
how long the agreement will last or if it is an ongoing arrangement; and
how the services will be provided (e.g. via telehealth conferences, at your clinic or the participant’s home).
How NB Commercial Law can assist?
Our experienced commercial lawyers can assist NDIS providers with drafting service agreements that comply with the standards under the NDIS legislation, Australian Consumer Law and the Australian Taxation Office.
Please contact us on (07) 3876 5111 or email [email protected].