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Glossary 

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ABLIS - Australian Business Licence and Information Service provided by the Commonwealth Government provides information about licences, permits and other authorities that you might need in order to run a business in Australia.

ABN - The Australian Business Number is an identifier for businesses when dealing with the Australian Taxation Office and other government departments and agencies.

ACCC - The Australian Competition and Consumer Commission is a national consumer protection agency which promotes competition and fair trading in the market place to benefit consumers, businesses and the community.

Acceptable quality - A basic level of quality and performance that is expected in goods considering their price and description (formerly merchantable quality).

ACL – The Australian Consumer Law commencing 1 January 2011 replaces previous Commonwealth, State and Territory consumer protection legislation in fair trading acts and the Trade Practices Act 1974.

ASIC - The Australian Securities and Investments Commission enforces company and financial services laws to protect consumers, investors and creditors.

Affidavit – A written statement sworn on oath or affirmed before a person with the appropriate authority, that the contents of the statement are true.

Association – A group of people who come together to share common interests. It includes a society, club, institution, incorporated association or other body. See also Incorporated association.

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Bait advertising - When retailers advertise goods or services at bargain prices to attract consumers into the shop when they know, or should know, that they are unable to supply reasonable quantities at those prices for a reasonable period. When advertised goods quickly run out, consumers are re-directed to higher-priced or lower-quality goods.

Balloon payment - A method of financing where a buyer makes small repayments for the term of the loan, with a large final repayment (balloon payment) that clears the debt.

BASIX - The Building Sustainability Index was introduced in July 2004 to ensure new homes use less water and energy.

Business name – A name under which a trader conducts business. A business name must be registered if it is different to the actual name of the trader.

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Co-borrower - A person taking out a loan with someone else.

Condition report - A written report on the condition of the rental premises completed by the landlord or agent and tenant at the start and end of a tenancy.

Consequential losses - Are the reasonably foreseeable costs to the consumer in time and money because something went wrong with the goods or services.

Consumer Credit Code - Governs most credit that is provided, or intended to be provided, wholly or predominantly for personal, domestic or household purposes. The Code applies throughout Australia.

Consumer detriment - Is the direct financial or material loss or disadvantage from a trader not complying with the law (for example, goods damaged or not delivered) costs incurred in seeking a remedy to the loss (for example, time lost in repeated trips to a trader to seek a refund).

Consumer goods - Are goods intended for personal, domestic or household use or consumption, or likely to be used for personal, domestic or household use or consumption.

Conveyancing - The legal work involved in preparing the sale contract, mortgage and other related documents during the sale of property or business.

Consumer guarantees – Are a set of rights and remedies for defective goods and services in the Australian Consumer Law. They replace existing statutory implied conditions and warranties for goods and services purchased on or after 1 January 2011.

Contract - A legally binding agreement between parties.

Commission - The amount of money that is payable to an agent for their services.

Compensation - An amount given or received as an equivalent for loss suffered.

Component pricing – Where a promoted or stated price is only part of the cost.

Comprehensive insurance - A type of car insurance which provides third party property cover and also covers damage to your vehicle in case of accident, damage, theft or fire.

Cooling-off period – The period during which you can cancel a contract for the purchase of goods, services or property, if you change your mind. Cooling-off periods and conditions vary, depending on the type of purchase.

Co-operatives - Organisations that are owned, controlled and used by their members. They are distinguished from other forms of incorporation by their participative ownership, democratic structure and use of capital for mutual rather than individual benefit. In NSW, co-operatives are registered under the Co-operatives Act 1992.

CPD - Continuing Professional Development is a condition of licence renewal for licence and certificate holders under the Property, Stock and Business Agents Act 2002; and Conveyancers Licensing Act 2003 as well as individuals licensed as a builder or swimming pool builder under the Home Building Act 1989. The purpose of CPD is to maximise consumer protection and ensure industry participants are continually updating their skills.

Credit rating - An assessment of the credit worthiness of individuals and corporations. It is based on the history of borrowing and repayment, as well as the availability of assets and extent of liabilities.

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Default notice - A written notice that a lender will send a borrower, guarantor or mortgagor before they take legal action to enforce their rights, for example, recover an overdue debt.

Default rate or fee - Additional interest and/or fees that are charged on payments that are overdue. When a default rate or fee is charged it is an amount added to the outstanding balance, separate from the regular fees and charges for the debt.

Demonstrator vehicles - Vehicles that dealers have used to demonstrate new cars to potential buyers.

Depreciation - The decrease in value of any type of property over a period of time due to age or wear and tear.

Dummy bidding - False bidding on behalf of the seller to inflate the sale price of property being auctioned.

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Encumbrance - Any right, interest or claim held by one person over another person’s property. For example, a lender has an interest against a car when it has been used as security for a loan.

Excess - The amount of money that you may have to pay or to contribute for the repair or replacement of an item which you have insured, when making a claim on an insurance policy. If you are not at fault you may not have to pay excess.

Express warranty – The extra promise that suppliers and manufacturers often make about such things as the quality, state, condition, performance or characteristics of goods.  Under the ACL there is a consumer guarantee that an express warranty will be met.

Extended warranty - An additional warranty sometimes offered to consumers for a fee. Read the policy carefully, as conditions will apply.

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False billing - Also known as invoice fraud - demanding payment for unsolicited goods or services that have not been ordered or approved. The conduct is characterised by, for example, misleading documentation that resembles invoices for trade directory entries and/or magazine advertisements, making businesses believe some prior arrangement has been made for unsolicited services, claiming an affiliation with charities or other worthy causes when none exists or claiming there is a government requirement for the services.

Fixed rate of interest – An investment or loan interest rate that will remain the same for an agreed term.

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Gazumping - Occurs when you have a verbal agreement with an agent or seller to buy a property at an agreed price and may or may not have paid an ‘expression of interest’ or ‘holding’ deposit, but the property is not sold to you in the end. This usually happens when the vendor (the person selling the property) has decided to sell the property to someone else, usually for a higher amount. There is no binding agreement in the purchase of land until contracts have been exchanged.

Green slip – A common term for a form of car insurance called Compulsory Third Party (CTP) insurance that protects vehicle owners and drivers from legal liability for personal injury to any other party in the event of a personal injury claim.

Guarantor - A person who signs a guarantee with a lender promising to repay another person’s loan if the other person can’t or won’t.

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Incorporated association - A small non-profit community-based group or club incorporated under the Associations Incorporation Act 2009. It provides an easier and relatively inexpensive means of establishing a legal entity compared to forming a co-operative or a company.

Information standards - regulate the type and amount of information provided to consumers about specified goods and services.

Insurance - Involves the payment of money (a premium) to an insurer to issue a policy covering contingencies, for example, loss or damage of specified assets or goods that may occur in certain circumstances or death and disability.

Interest - The charge by a lender for using its money. This is usually expressed as a yearly rate and called the annual percentage rate.

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Landlord - A person who leases land or buildings to a tenant.

Lay-by - An agreement to pay for a particular item by instalments where the consumer gets the goods when they have been paid for in full. The Australian Consumer Law requires the seller to give the consumer a written statement setting out the terms and conditions of the lay-by when the lay-by is entered into.

Lease of goods – An agreement where the lender continues to own the goods but the person leasing has possession of them for the term of the lease. At the end of the lease term the goods are returned to the lender.

Liability - An obligation to put right a problem – for example, fixing a defective product, providing compensation or taking other action

Licence - Permission granted by a government authority to engage in a business occupation or activity.

Linked credit - Finance arranged by the supplier of goods or services which someone else provides.

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Mediation – Use of a person to work with parties to resolve a dispute informally.

Multiple pricing - An item that has more than one displayed price. The other price(s) can be on the item itself, in a catalogue, on a shelf in the store or the price that the item scans at. (formerly dual pricing)

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National Credit Code - Governs most credit that is provided, or intended to be provided, wholly or predominantly for personal, domestic or household purposes. The Code applies throughout Australia.

NCAT - NSW Civil and Administrative Tribunal resolves disputes between tenants, landlords, traders and consumers. The NCAT deals with a range of disputes, including home building, strata schemes, community schemes, retirement villages, residential parks and motor vehicle disputes.

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Partnership - A legally binding agreement between two or more parties to work together as joint principals in a business.

Pawnbroker - Someone who lends money with interest, in exchange for goods given to the pawnbroker as security.

Phishing – An e-mail or Short Message Service (SMS) technique used by fraudsters to obtain personal information for the purpose of identity theft. The recipient is usually directed to a website and asked to update personal information, such as passwords, credit cards or banking details. The website is set up to steal the customer’s personal details and identity, to obtain unauthorised access to the customer’s money and possibly commit crimes in their name.

Premium - The amount of money you will need to pay an insurance company for insurance cover.

Principal - The amount deposited or borrowed upon which interest is paid or charged.

Product related service - A service for or relating to the installation, maintenance, repair, cleaning, assembly or delivery of consumer goods of a particular kind.

Proof of transaction - proof of purchase - Receipts, invoices or dockets provided to consumers by traders for purchasing goods or services.

Pyramid selling scheme - An illegal form of multi-level marketing where participants receive benefits for recruiting others to participate in the scheme. Income is primarily generated through the recruitment of others and the sale of goods or services is incidental.

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Rectification order - Issued by a building inspector under the Home Building Act 1989 when parties are unable to agree on a resolution and defective or incomplete work exists.

Refund - An amount given back to a consumer when a sale contract is cancelled.

Remedy - An attempt to put right a fault, deficiency or a failure to meet an obligation.

Rental bond - An amount of money paid by a tenant as a form of security for the landlord against any future breaches of the tenancy agreement between the tenant and landlord.

Renter - Someone who pays rent to use or occupy land, a building, or other property owned by another (see also Tenant).

Rent - A payment made periodically by a tenant to a landlord in return for the use of land, a building, an apartment, an office or other property.

Repossession - Where a lender takes property that has been provided as security for a loan. This will generally happen after the borrower has stopped repaying the loan (making payments). In certain circumstances, the lender can sell the property and the money obtained from the sale is used to repay or reduce the debt.

Residential tenancy agreement (or lease) - A legally binding written agreement between the tenant and the landlord. It sets out the rights and responsibilities of both parties in accordance with the Residential Tenancies Act 2010.

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Sale contract - A sale contract is entered into every time goods or services are bought. It can sometimes be a written document but not always.

Scam - A fraudulent business scheme; a swindle designed to con you out of your cash.

Second-hand vehicle - A vehicle that has previously had one or more owners.

Sole trader - A type of business entity which legally has no separate existence from its individual owner.

Split interest rate - Where part of an amount borrowed has a fixed interest rate applied and the remainder amount has a variable interest rate applied.

Stamp duty - A type of tax that is imposed on certain transactions.

Statutory declaration – A written statement declared to be true in the presence of an authorised witness.

Strata scheme - A building or collection of buildings, where individuals each own a portion (eg. an apartment or townhouse) but where there is common property (eg. external walls, windows, roof, driveways, fences, lawns and gardens) which every owner co-owns.

Subpoena –  A document issued by a court, requiring the person named to attend at the court to give oral evidence and/or produce documents or other things.

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Tenant - Someone who pays rent to use or occupy land, a building, or other property owned by another.

Third-line forcing - A form of exclusive dealing, generally an illegal practice. It involves the supply of goods or services on condition that the buyer purchases goods or services from a particular third party, or a refusal to supply because the buyer will not agree to that condition.

Third party property insurance - A type of car insurance which covers you for any damage that your car causes to someone else’s vehicle or property but not any damage to your own car.

Trade mark - A trade mark can be, among other things, a word, phrase, letter, number, sound, smell, shape, logo, picture, aspect of packaging or a combination of these. It is used to distinguish the goods and services of one trader from those of another. Registration of a trade mark provides the holder with legally enforceable rights relating to the use of the trade mark.

Tribunal - A body set up by the government to adjudicate and resolve particular matters (see also NCAT).

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Unconscionable conduct – A statement or action so unreasonable it defies good conscience. A business must not act unconscionably when selling or supplying goods and services to a consumer or supplying or acquiring goods and services to or from a business

Undisturbed possession of goods - A supplier guarantees that no one will try to repossess or take back goods bought by a consumer, or prevent the consumer from using those goods,

Unfair contract terms - A term is unfair when it causes a significant imbalance in the parties’ rights and obligations arising under the contract and it is not reasonably necessary to protect the legitimate interests of the business and it would cause detriment to another party if it were to be applied or relied on.

Unsolicited consumer agreements – An agreement is unsolicited when a supplier, their salesperson or dealer approaches or telephones a consumer without invitation from that consumer;  it results from negotiations by telephone or at a location other  than the supplier’s premises; and the total value of the goods or services is more than $100, or the value was not established when the agreement was made.

Unsolicited supplies - Are goods or services supplied to someone who has not agreed to buy or receive them.

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Valuer - Someone authorised to value the worth of property (eg. land, buildings, assets).

Variable interest rate - An interest rate that may move up and down during the period of the loan.

Voluntary code of practice - Voluntary codes of practice or codes of conduct promote awareness and use of agreed fair trading practices in particular industries. They supplement legal obligations and provide guidance and standards for dispute resolution between consumers and traders.

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Warranty – Sellers, manufacturers and service providers can make extra promises about their goods and services as a way of giving consumers more confidence in their quality, or the level of consumer protection if things go wrong.  These promises are known as warranties.  Warranties are different to consumer guarantees; under the Australian Consumer Law you automatically get consumer guarantees when you purchase a good or service.

Warranty against defects – also known as a manufacturer’s warranty, is a promise made by a seller, manufacturer or service provider about what they will do if there is a problem with goods or services, i.e. repair or replace goods or parts, resupply or fix problems with services or provide compensation.  A warranty against defects does not replace a consumer guarantee.

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