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ACCC puts Aussie telcos on notice about common contact clause

By Heather Wright, Mon 18 Jan 2016
FYI, this story is more than a year old

Australian telecommunications providers are being put on notice about potentially unfair, outdated contract terms.

The ACCC says it will be writing to telecommunications providers after Exetel agreed to compensate consumers who were forced to change broadband plans or terminate their Exetel service without penalty last year.

The telco relied on a clause in its standard residential broadband agreement which provided that Exetel could vary any part of the agreement for any reason.

The ACCC investigated and says it considered the clause an unfair contact term likely to contravene the Australian Consumer Law.

The ACCC also considered that Exetel’s advertising of the fixed term plans was likley to be misleading because it represented that consumers would receive the service for the 12-month fixed term, when this was not necessarily the case.

Michael Schaper, ACCC acting chair, says the Australian Consumer Law provides that unfair contract terms in standard form consumer contracts are void.

“The ACCC considers that contract terms which allow a supplier to unilaterally vary the agreement for any reason are likely to be unfair,” Schaper says.

“The ACCC will also be writing to other telecommunications providers with similar outdated terms in their consumer agreements, to put them on notice of the ACCC’s concerns and encourage them to review and update their standard agreements,” he says.

Schaper ays telcos also need to be mindful that from November 2016, the law will also protect small businesses from unfair terms in standard form contacts.

The ACCC says representations made in advertising about the benefits available to consumers under standard form supply agreements, and which contain a term allowing the supplier to vary the contract for any reason, have the potential to mislead consumers about the benefits offered and their rights under the contract.

In Exetel’s case the telco has agreed to refund any additional monthly subscription costs incurred for the remained of the fixed term by customers who changed to a new plan, and refund activation charges paid by custoers who terminated their Exetel service, rather than change to a new plan.

The company has also agreed to remove the clause from its residential broadband standard form of agreement.

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