Unfair contract terms report

The ACCC has published a report on the outcome of its industry review of unfair contract terms.

The ACCC reviewed standard form consumer contracts in the airline, telecommunications, fitness and vehicle rental industries, as well as some contracts commonly used by online traders. A select number of standard form contracts used by prominent travel agents were also examined.

The review identified:

  • Contract terms that allow the business to change the contract without consent from the consumer.
  • Terms that cause confusion about the agency arrangements that apply and that seek to unfairly absolve the agent from liability.
  • Terms that unfairly restrict the consumer’s right to terminate the contract.
  • Terms that suspend or terminate the services being provided to the consumer under the contract.
  • Terms that make the consumer liable for things that would ordinarily be outside of their control.
  • Terms that prevent the consumer from relying on representations made by the business or its agents.
  • Terms seeking to limit consumer guarantee rights.
  • Terms that remove a consumer’s credit card chargeback rights when buying the service through an agent.

The reports states “ACCC found that in the majority of industries reviewed, most businesses took advantage of the opportunity to align their standard form contracts with the new national unfair contract terms provisions of the ACL. Problematic terms were identified and either amended or deleted in each of the eight categories listed above. Particularly significant changes were achieved in relation to standard form contracts of major airlines, with 79% of problematic terms identified by the ACCC amended or deleted as a result of the review.

Some businesses have not fully cooperated with the ACCC during the review or have chosen not to change their standard form contracts to address problematic terms that were identified by the ACCC. The ACCC is now moving from a compliance to an enforcement response to resolve outstanding issues.”

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