ACCC review leads some businesses to amend unfair contracts

ACCC review leads some businesses to amend unfair contracts

The consumer watchdog may take court action against businesses that have not cooperated or addressed problematic terms

Some businesses have amended or removed certain terms from consumer contracts following a review by the Australian Competition and Consumer Commission.

The review examined consumer contracts in the airline, telecommunications, fitness, vehicle rental industries, and online traders and travel agents. In most cases, the businesses under review have made the required changes.

However, the ACCC is considering court action against some other businesses that have not fully cooperated during the review, or made changes it sees as unfair provisions.

"The aim of the industry review was two-fold. First we wanted to evaluate compliance, and secondly work with business to achieve positive changes to standard form consumer contracts," ACCC Chairman, Rod Sim, said.

As part of the review and engagement process, the ACCC identified eight types of terms which were of concern and invited businesses to change or remove them.

One example was Jetset Travel, which has removed clauses that required consumers to waive their chargeback rights through credit and debit cards. ACCC had deemed those terms as unfair.

Sims said the report marks the transition to a more enforcement-focused approach. It also called on all businesses to consider the terms and conditions of their own standard form contracts in light of the recent findings. He added that good contract terms offer an opportunity for businesses to deal up front with areas of consumer dissatisfaction and dispute, thereby reducing complaints.

National unfair contract terms were introduced as part of the Australian Consumer Law which came into effect on July 1, 2010. Under these laws, a court may determine that a term of a standard form consumer contract is unfair and therefore void.

Sims also explained the challenges in taking "unconscionable" cases to court.

"The ACCC has taken on a number of unconscionable conduct cases, some where we have been successful and few of late where we have been unsuccessful. While disappointing, these unsuccessful cases will not deter us in taking action in future cases as we must seek to protect disadvantaged consumers."

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