Updated as at 20/9/2001.
PART A - OVERVIEW
Consumers are protected by legislation and common law (or judge made law) remedies for unconscionable or deceptive practices. At the federal level, there is the Trade Practices Act 1974 (Cth) which prohibits misleading and deceptive conduct in trade or commerce and offers a range of remedies beyond those of the common law.
At the state level, there are various Fair Trading Acts which mirror the Trade Practices Act 1974 (Cth) . The States have additional consumer protection legislation. For example, in NSW there is the Contracts Review Act 1980 (NSW) , the Door-to-Door Sales Act 1967 (NSW) and the Consumer Claims Act 1998 (NSW) . Consumer Claims Act 1998 (NSW) is a particularly useful mechanism for consumer redress as it enables a cheap, quick and essentially risk free dispute adjudication in the Consumer Claims Division of the Fair Trading Tribunal.
Voluntary Codes provide another source of consumer protection. The Electronic Funds Transfer Code of Conduct protects consumers when they transfer funds electronically.
The following discussion deals separately with consumer credit, and trade practices and the EFT Code in two three parts.
PART B - CONSUMER CREDIT
1. Consumer Credit Code
Consumers who purchase goods or services or other things using credit are protected under the Consumer Credit Code 1996 (Credit Code). The Credit Code is Australia wide given each State has enacted mirror legislation. A credit transaction will be regulated by the Credit Code when a consumer uses the credit for household or domestic purposes, the period for repayment exceeds 62 days and there is a charge made for the provision of credit (eg interest). In most cases the Credit Code regulates credit cards, home loans, personal loans and also regulates associated mortgages and leases.
2. E-commerce
The main issues arising for formation and administration of credit contracts on the internet are essentially the same issues which arise for all online contracts:
(a) ensuring that the identity of the consumer is properly ascertained;
(b) ensuring that the consumer has properly understood the terms and conditions of the contract;
(c) ensuring that the consumer has undeniably accepted the terms and conditions; and
(d) ensuring that the consumer has undeniably received copies or notices where the Credit Code requires these to be given.
The Electronic Transaction Acts (when all in force) will ensure that electronic signatures are valid and that certain information and notices can be given electronically. As at March 2001, it appears that the sending of default notices under the Credit Code will be exempted from the operation of the Electronic Transaction Acts. See fact sheets on Online Contracts and Electronic Transactions Act.
3. Consumer protection under the Credit Code
The most important consumer protection aspects of the Credit Code are:
(a) the disclosure requirements in the pre-contract and contract documentation;
(b) the disclosure requirements in the statements of account;
(c) mechanism for disputing liabilities entered on a consumer’s account;
(d) standards for advertising;
(e) the contract variation provisions on the grounds of consumer hardship;
(f) the unjust contract provisions which enable contracts to be re-opened;
(g) the notice provisions in relation to default and regulation of enforcement; and
(h) the provision which, in certain cases, make credit providers liable for the misrepresentations of suppliers of the goods or services bought on credit.
4. Disclosure Requirements - Credit Contracts
The Credit Code (section 15) specifies the matters that must be disclosed in both pre-contractual and contract documents. The matters which must be disclosed include: the credit providers name, the amount of credit being provided, the annual percentage rate, the manner in which interest is calculated, the total amount of interest charges payable, the amount of repayments, the credit fees and charges, changes which may affect the interest and credit fees and charges, matters relating to statements of account, any default rates of interest, any enforcement expenses, whether there is a mortgage or guarantee, whether a commission has been paid for the introduction of credit, and whether there is any insurance financed under the credit contract.
5. Disclosure Requirements - Statements of Account
The Credit Code (section 32) sets out the matters which must be disclosed in statements of account. These include the statement period, the opening and closing balances, the particulars of credit provided during the statement period, who the credit was paid to, the interest charges, other fees and charges, any payments made, any amounts payable by the consumer, any insurance payments, and any alterations to previous statements.
6. Disputing Account entries
The Credit Code (section 36) provides a mechanism for consumers to dispute entries in their statements of account. There are strict time limits which apply. For continuing credit contacts (eg. credit cards) a dispute must be notified to the credit provider before the date on which payment for that particular account is due and in relation to any other form of credit contract notice of the dispute must be given to the credit provider within 30 days of receiving the statement of account. If the consumer is not able to resolve the dispute with the credit provider they may take their dispute to Court. Depending on whether or a formal Court or a specialist Tribunal has jurisdiction, this can be relatively easy and risk free for the consumer.
7. Hardship Variations
The Credit Code (section 66) gives consumers a right to vary their contracts on the grounds of hardship. Hardship is considered to be when a consumer is unable because of illness, unemployment or other reasonable cause to meet their obligations under a credit contract and where the consumer also reasonably expects to be able to discharge their obligations if the terms of the contract were varied. The manner in which credit contracts may be varied are by extending the period of the contract and reducing the amount of each payment due under the contract accordingly; or postponing during a specified period the payments which are due; or extending the period of the contract and postponing payments. If a credit provider does not accept a consumer’s request to vary the credit contract the consumer may take it to Court. Once again, depending on whether or a formal Court or a specialist Tribunal has jurisdiction, this can be relatively easy and risk free for the consumer.
8. Unjust Contracts
The Credit Code (section 70) enables the Court to reopen unjust transactions if satisfied that the circumstances in which the credit contract was entered into were unjust. The matters which may be considered by the Court include:
* the consequences of compliance or non-compliance with any or all of the provisions of the contract;
* the relative bargaining powers of the parties;
* whether or not at the time the contract was entered into its provisions were the subject of negotiation;
* whether or not it was reasonably practicable for the consumer to negotiate for the alteration of any of the provisions of the contract;
* whether or not any of the provisions of the contract impose conditions that are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of a party to the contract;
* whether or not the consumer was reasonably able to protect their interests because of their age or physical or mental condition;
* the form of the contract and the intelligibility of the language in which it is expressed;
* whether or not independent or other expert advice was obtained by the consumer;
* the extent to which the provisions of the contract and their legal and practical effect were explained to the consumer and whether or not the consumer understood those terms;
* whether credit provider or any person exerted or used unfair pressuring, undue influence or unfair tactics on the consumer;
* whether the credit provider took measures to ensure the consumer understood the transaction;
* whether at the time the contract was entered into the credit provider knew or could have ascertained that the consumer could not pay in accordance with the contract terms or without substantial hardship;
* whether the terms of the transaction or the conduct of the credit provider is justified in light of the risks undertaken by the credit provider;
* the terms of other comparable transactions; and
* any other relevant factor.
9. Consequences of Breach
If a credit provider breaches certain "key" provisions of the Credit Code a civil penalty can be imposed up to a maximum of all interest charges under the contract. If the breach is systemic (eg in a standard contract used by the credit provider), the penalty can be the interest on all those standard contracts which have been entered into by the credit provider.
In relation to non-"key" breaches of the Credit Code, the credit provider is liable for any loss arising from the breach and, where specified, criminal penalties.
PART C - TRADE PRACTICES
1. Who does trade practices legislation apply to?
In Australia, the Trade Practices Act 1974 (Cth) generally applies to corporations rather than individuals. It will apply to individuals who are engaging in interstate trade or commerce or aiding or abetting a breach of the Act by a corporation. The actions of individuals are otherwise covered by equivalent State or Territory trade practices legislation.
If an organisation is incorporated in or carries out business within Australia it is bound by the trade practices legislation. Breach of the trade practices legislation by a corporation or individual may result in significant fines and in some cases criminal liability.
The trade practices legislation impacts on the internet in the following areas:
(a) implies warranties into certain transactions;
(b) prohibits unconscionable conduct and contracts; and
(c) prohibits misleading or deceptive conduct.
2. Terms implied into consumer contracts by the trade practices legislation (TPL)
The TPL implies into all consumer contracts a number of non-excludable conditions and warranties. Any term of a contract that has the effect of excluding, restricting or modifying rights or liability under these implied terms will be void. The definition of consumer includes a purchaser of goods or services for less than A$40,000 or if the price exceeds A$40,000, where the goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption.(1)
(a) Warranties and conditions implied in relation to goods include:
* a condition that goods supplied by description will comply with that description;(2)
* a condition that goods will be of merchantable quality (this right does not apply if goods were sold at auction or if the relevant defect was specifically drawn to the consumerÌs attention before the contract was made, or the consumer examined the goods prior to sale, and that examination should have revealed the defect);(3) and
* a condition that where the purpose is made known the goods are fit for the purpose.(4)
(b) Warranties and conditions implied in relation to services include:
* a warranty that services will be rendered with due care and skill;(5)
* a warranty that any materials supplied in connection with the services will be reasonably fit for the purpose for which they are supplied;(6) and
* if the consumer makes known any particular purpose for which the services are required, a warranty that the services and materials supplied will be reasonably fit for that purpose (unless the consumer does not rely, or it is unreasonable for him or her to rely on the skill or judgment of the corporation).(7)
Where any of the above conditions and warranties are breached the consumer has a right to take action for breach of contract rather than an action for breach of the trade practices legislation.(8)
Given the definition of consumer is so broad the above conditions and warranties will be implied into a large number of contracts and cover contracts between businesses.
In cases where the cost of the goods or services in question does not exceed A$40,000 and the goods or services are other than those ordinarily acquired for personal, domestic or household use, the legislation permits suppliers to limit their liability to the replacement or repair of the goods, or the cost of their replacement or repair or, in the case of services, to the resupply of the services or the cost of resupply.(9) This is subject to an overriding test of fairness. In determining what is fair, a court will consider all the circumstances of the case, including the strength of the bargaining positions of the respective parties and whether the buyer knew or ought reasonably have known of the existence of the limitation.
3. Unconscionable Conduct
The TPL imposes on corporations a general duty to trade fairly by prohibiting them from engaging in unconscionable conduct:
* in the supply of domestic goods or services to consumers;(10) and
* in the supply or acquisition of goods or services worth up to A$1 million to businesses that are not listed companies.(11)
The term unconscionable is not defined in the Act but is defined by the Courts. Whether a Court will identify conduct as unconscionable will depend on all the circumstances of the case. Generally unconscionable conduct occurs whenever one party to a transaction is at a special disadvantage in dealing with the other party because of illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affecting his ability to conserve his own interests, and the other party unconscionbaly takes advantage of this opportunity.(12)
Whilst the Courts are entitled to take into account whatever considerations they see fit, the legislation sets out various issues to be taken into account in determining whether conduct was unconscionable. The list differs slightly for unconscionable conduct in relation to consumers as opposed to businesses.
(a) For consumers the factors to be considered include:
* the relative bargaining power of the parties;
* whether conditions imposed by the supplier were reasonably necessary for the protection of its legitimate interests;
* whether the consumer was able to understand the documentation;
* whether undue influence was exerted, or unfair tactics used; and
* the amount for which and circumstances under which the consumer could have acquired equivalent goods or services from a third party.
(b) For businesses the factors to be considered include those listed above in addition to the following:
* the extent to which conduct was consistent with conduct in similar transactions with like customers;
* the requirements of any industry code applicable to the supplier;
* any risks to the business consumer arising from the supplierÌs intended conduct that the supplier should have foreseen that would not be apparent to the business customer;
* the extent to which the supplier was willing to negotiate the terms and conditions of any contract of the supply of goods and services; and
* the extent to which the parties acted in good faith.
The above considerations are not exhaustive. The circumstances in which a Court might find conduct unconscionable are very broad. They include, for example, lack of education or lack of assistance or explanation in circumstances where assistance or explanation are necessary.
Remedies available for unconscionable conduct include remedial orders (such as rescission of any contract entered into as a result of unconscionable conduct) and injunctions.(13) The Court has a wide discretion to make orders as it thinks fit. Application for relief may be made by a party who has suffered loss or damage as a result of a contravention or by the Australian Competition and Consumer Commission (ACCC) on their behalf.
The ACCC is responsible for overseeing compliance with the TPL and has clearly indicated that one-sided contracts present a high risk situation for a party seeking to enforce them. Some examples of terms and conditions that the ACCC has indicated may be considered to be one-sided are those which:
* appear to exclude the legal rights of the weaker party;
* state that the weaker party has agreed to, read or understood terms when this is not so;
* purport to agree that no misrepresentations have been made by the stronger party, or
* require a weaker party to comply with onerous or unrealistic conditions.
The ACCC has also indicated that the failure to negotiate reasonable amendments to standard form terms and conditions will be considered as a factor towards unconscionability particularly when high risks are involved for the weaker party.
4. Misleading and deceptive conduct
Trade practices legislation make misleading or deceptive conduct illegal. With regard to the internet, it may be misleading or deceptive conduct where a consumer is or is likely to be mislead or deceived by a statement on the website or if it is unclear when you connect from one website to another.
The use on websites of internal and external links, frames, metatags, the location and prominence of disclaimers and content generally must not be misleading or deceptive to the extent goods or services of A are passed off as those of B.(14) The prohibition applies to unintentional misleading or deceptive conduct whether through silence or gratuitous expression of opinion, and cannot be contracted out of. Under the TPL, it is not necessary to prove customers have actually been misled.(15)
See fact sheet on Misleading and Deceptive Conduct.
A domain name on the internet may constitute misleading information. For example, an internet user may have arrived at a "wrong" website from a misleading impression of some relationship existing between the website and the owner of a well known trade mark or business name.
Possible categories of misleading and deceptive conduct in relation to domain names include:(16)
(a) falsely suggesting a connection between the site and a known business or particular goods or services (eg ninenews.com);
(b) falsely suggesting particular qualities or attributes (eg free.shareware.com);
(c) buying the domain name of a rival company and redirecting traffic from that site to the former site; or
(d) exploiting deliberate reading or typing mistakes (eg westcap.bank.com) or abbreviations.
5. Other relevant provisions of the trade practices legislation
Information considered misleading or deceptive conduct (17) may also be subject to liability under other provisions of the trade practices legislation including:
(a) making false or misleading representations about attributes of goods or services or about the corporation's relationship with others;(18)
(b) making false representations or engaging in other misleading conduct in relation to the sale of land;(19)
(c) engaging in misleading conduct about the nature or terms of employment;(20)
(d) offering gifts, prizes and free items without the intention of supplying them;(21)
(e) engaging in misleading conduct about the nature, characteristics, suitability or quantity of any services;(22)
(f) offering goods or services for a price if the corporation reasonably believes it will not be able to do so;(23)
(g) making false or misleading representations about the profit or risk of business that the corporation has represented can be carried on at home;(24) and
(h) asserting the right for payment for unsolicited goods or services, or for making an entry in a directory.(25)
PART D – ELECTRONIC FUNDS TRANSFER CODE
As at November 2001, there are two versions of the Eletronic Funds Transfer Code of Conduct the original Code and the revised Code. The following discussion concentrates on the revised Code (EFT Code) because:
(a) the original EFT Code expires on 1 April 2002, (26) and
(b) the revised EFT Code provides greater consumer protection.
The original EFT Code currently only applies to transactions that are initiated by an individual through an electronic terminal by the combined use of an EFT plastic card and a PIN.
The revised EFT Code goes further and covers the use of credit cards for online payments, SVCs and digital cash and all forms of access methods, including digital signatures and biometric identifiers (27).
The EFT Code provides protection for consumers who use an organisation’s (28) ATM, EFTPOS, internet, telephone banking, or stored value (SV) facilities (including smart cards).
1. Who does the EFT Code apply to?
As the EFT Code is voluntary, it only applies to member organisations who have specifically adopted the EFT Code. (29)
The EFT Code only protects individuals. Businesses and third party relationships are not covered.
The Code regulates:
* methods of access during an electronic transaction, such as the use of an ID number, password, PIN or digital signatures.
* transactions that utilise SV facilities and digital coins for electronic payment.
* transactions relating to third parties that are not payments from “biller accounts” to the organisation. (30)
2. Consumer protection under the EFT Code
Organisations that subscribe to the EFT Code must:
(a) make available copies of the terms and conditions of using their EFT facilities or SV facilities;(31)
(b) issue receipts which contain sufficient information enabling the consumer to track their transactions; (32)
(c) make it clear who is liable for unauthorised transactions; (33)
(d) have developed complaint and dispute resolution procedures designed to deal with complaints made by consumers; (34) and
(e) have privacy policies in place in accordance with the requirements of the Privacy Act 1988. (35)
(a) The terms and conditions
* must reflect the requirements of the EFT Code and cannot create liabilities and responsibilities which go beyond the EFT Code;
* for the use of EFT facilities must set out:
(i) how a consumer can direct the organisation to process an electronic transaction on the consumers EFT account, including password requirements (access method);
(ii) any costs or restrictions associated with the use of the access method;
(iii) the types of transactions and accounts that can be accessed with the access method;
(iv) the availability of a credit facility;
(v) the procedure for reporting misuse, loss or theft of an access device (e.g. plastic card) or breach of security of an access code (e.g. password);
(vi) the complaint and dispute resolution procedures; and
(vii) the circumstances in which the consumer is liable for losses resulting from unauthorised transactions.
* for the use of SV facilities must set out:
(i) any costs associated with the use of a stored value facility;
(ii) the expiry date of the SVC;
(iii) how SV can be exchanged for money;
(iv) the procedure for reporting a malfunction or error in the operation of a SV facility or loss or theft of the SV facility or the SV controlled by that facility; and
(v) details of any entitlements to refunds for lost or stolen SV.
* are able to be changed by the organisation. For changes detrimental to the consumer, the organisation must give the consumer at least 20 days written notice and adequate notice for all other changes, unless there is an immediate necessity for security reasons.
(b) Issue of receipts
An organisation must ensure where possible that a receipt is issued for every transaction whether made over the internet or using EFTPOS facilities. The receipt must indicate the amount, exact time, place, type of transaction, an identifier of some sort distinguishing the particular customer and where security and privacy permits, the remaining or accumulated balance in the consumer’s account. Organisations must also provide periodic statements to their consumers.
(c) Liability for unauthorised transactions
* For EFT facilities:
Generally, a consumer is not liable for losses incurred by unauthorised transactions unless the organisation can prove (on the balance of probability) that the consumer has contributed to the losses sustained by:
(i) compromising the security of the access code or access device; or
(ii) unreasonably delaying notification of the misuse, loss or theft of an access device or breach of security of an access code.
However, even if the consumer has not contributed to the losses but a password is required for access, the consumer is liable for the lesser of the amount of either $150, or the loss sustained or alternatively, an agreed amount between the organisation and the consumer.
* For SV facilities:
A consumer’s right to a refund for a preventable loss depends on the technical capabilities of an organisation’s system, including prevention of unauthorised use and having an independent record of the balance of the facility at any time. (36)
(d) Complaint and dispute resolution
* All consumer complaints must initially be made to the organisation.
* If the complaint is not able to be settled immediately, the organisation then investigates the complaint in accordance with the organisations procedures as set out in the terms and conditions within the timeframe allowed for in clause 10 of the EFT Code.
* When the investigation is completed, the consumer must be informed of the outcome and reasons for the outcome. For unfavourable outcomes, information where further action can be taken with relevant contact details must also be given to the consumer.
* Where appropriate, adjustments to the account balance is made and the consumer is notified in writing. If found that the consumer is held to be liable in some part of the transaction, the organisation must make available copies of any document or evidence relevant to the investigation and of any system or equipment malfunction.
* If the organisation does not comply with the EFT Code in relation to the complaint investigation and resolution procedures, the organisation may be held fully or partly liable to compensate the consumer, even if the organisation ultimately was not determined liable overall.
(e) Privacy
The EFT Code provides that from 21 December 2001 organisations must comply with the National Privacy Principles (NPP) in the Privacy Act 1988 (Cth). See Privacy fact sheet.
(f) SVC
* An organisation that provides SV has a responsibility for ensuring appropriate facilities are available for consumers to check the balance of stored value on a SVC. Consumers have a right to exchange SV for hard currency or replacement SV, though this may be subject to a fee.
4. Chargebacks - Another form of consumer protection concerning the internet
Many credit card companies offer “chargebacks” to internet shoppers. This arises when a customer has received goods that are damaged in transit or are not received at all. If either party has not digitally signed the online contract then the customer has a slight advantage as regards to fulfilling the payment obligation. The customer can dispute the credit card authorisation with his or her bank.
The banks operate under a loose rule sometimes known as the 120 day rule. The rule states that where a credit transaction is effected without any signed documentation and the bank cannot obtain payment from the customer within 120 days after the transaction was allegedly effected, the merchant must repay the money previously paid to it by the bank plus any administration costs incurred by the bank. The bank will generally obtain redress from the merchant and it is for the merchant to prove the transaction against the customer.
Other relevant Fact Sheets:
Sources of Law
Fair Trading Act 1987 (WA)
Fair Trading Act 1999 (VIC)
Fair Trading Act 1987 (SA)
Fair Trading Act 1989(QLD)
Fair Trading Act 1987(NSW)
Fair Trading Act 1992 (ACT)
Fair Trading Act 1990 (TAS)
Consumer Affairs and Fair Trading Act 1990 (NT) Contracts Review Act 1980 (NSW)
Door-to-Door Sales Act 1967 (NSW)
Consumer Claims Act 1998 (NSW)
Fair Trading Tribunal Act 1998(NSW)
Consumer Credit Act 1995(VIC)
Consumer Credit Act 1995(ACT)
Consumer Credit Act 1995(NSW)
Consumer Credit Act 1995(NT)
Consumer Credit Act 1994 (QLD)
Consumer Credit Act 1995(WA)
Consumer Credit Act 1996 (TAS)
End Notes
1. Trade Practices Act 1974 (Cth) , s 4B. To fall within the definition, the person must not have acquired the goods for the purpose of resupply or to use them in a process of production, manufacture or repair.
2. Trade Practices Act 1974 (Cth) , s 70.
3. Trade Practices Act 1974 (Cth), s 71(1). Goods are of "merchantable quality" if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and all the other relevant circumstances ( s 66(2)).
4. Trade Practices Act 1974 (Cth) , s 71(2). This condition will not apply where the circumstances show that the consumer does not rely, or it was unreasonable for him or her to rely, on the skill or judgment of the vendor.
5. Trade Practices Act 1974 (Cth) , s 74(1).
6. Trade Practices Act 1974 (Cth), s 74(1).
7. Trade Practices Act 1974 (Cth), s 74(2).
8.E v Australian Red Cross Society (1991) 27 FCR 310.
9. Trade Practices Act 1974 (Cth), s 68A.
10. Trade Practices Act 1974 (Cth), s 51AC.
11. Trade Practices Act 1974 (Cth), s 51AC.
12. Blomley v Ryan (1956) 99 CLR 362 per Kitto J (at 415).
13. Trade Practices Act 1974 (Cth), sections 80 and 87(1A).
14. See generally B Finch "Consumer Protection on the Internet" in Going Digital 2000: Legal Issues for E-commerce, Software and the Internet (2000); Misleading and Deceptive Conduct Fact Sheet.
15. Applied Business Technology Pty Ltd v Grandmaster Computers [1999] FCA 36.
16. B Finch p 270.
17. Under the Trade Practices Act 1974 (Cth) s 52 and State and Territory equivalents.
18. Trade Practices Act 1974 (Cth) s 53. See Trumpet Software Pty Ltd v Ozemail Pty Ltd (1996) 34 IPR 481; Applied Business Technology Pty Ltd v Grandmaster Computers [1990] FCA 36.
19. Trade Practices Act 1974 (Cth) s 53A.
20. Trade Practices Act 1974 (Cth) s 53B.
21. Trade Practices Act 1974 (Cth) s 54.
22. Trade Practices Act 1974 (Cth) s 55A. See ACCC v Internic (1998) ATPR 41-646.
23. Trade Practices Act 1974 (Cth) s 56.
24. Trade Practices Act 1974 (Cth) s 59.
25. Trade Practices Act 1974 (Cth) s 64. See ACCC v Goldstar (unreported, Fed Ct (Qld), No 1440/98, 06/11/1998, Drummond J).
26. Refer to the original EFT Code for a summary.
27. Refer to the definition of “biometric identifiers” in the dictionary.
28. The EFT Code refers to both “account institutions” and SV operators (providers of SV cards. See definition in dictionary.
29. ASIC keeps a list of organisations that have advised ASIC that they subscribe to the EFT Code and are members.
30. Refer to definition of “biller accounts” in dictionary.
31. EFT Code, clauses 2 to 3, 12 to 14 and 16.
32. EFT Code, subclause 4.1 and clause 22.
33. EFT Code, subclauses 5.5 and 5.6.
34. EFT Code, subclauses 10.2, 10.4 to 10.7 and 10.9 to 10.13.
35. EFT Code, subclauses 21.1 to 21.2 and clause 22.
36. EFT Code, subclause 16.1. A preventable loss is the amount of SV which the organization could have prevented from being transferred from the consumers SV facility.