TPG, Telstra change 'unfair' customer contracts

Australia's consumer watchdog has found the telecommunications industry most guilty of having customers agree to contract terms that allow the business to change without their consent.

The Australian Competition and Consumer Commission reviewed 11 telcos' standard form contracts and found six of the contracts included terms that allowed the business to vary the contract, which the ACCC highlighted as unfair.

Four telcos, including Telstra and TPG, have altered the terms of their contracts as a result. The ACCC declined to name the other telcos involved.

The ACCC's review looked at consumer contracts in the airline, fitness, vehicle rental and telecommunications industry and found eight specific terms of concern:

• 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 ACCC found three terms of concern within TPG’s consumer contract, including a term allowing the ISP to change subscription fees charges to customers without providing notice.

“You must pay all subscription fees applicable to the plan for which you have registered. You understand that all fees and charges may be altered from time to time by us without notice, however, we will not increase the subscription fee for your plan until the end of the Minimum Contract Term,” the original contract stated, according to the ACCC report.

It had also included a term involving the right to suspend or disconnect a customer’s service at any time without notice, as well as another around limiting consumer guarantees.

The ACCC said the clause demonstrated a serious level of non-compliance with national unfair contract laws. TPG agreed to delete the three terms of concern.

Telstra also found itself under the spotlight for a provision giving Telstra the discretion to cancel or suspend services in the event of ‘excessive or unusual use’. 

Telstra has amended the term to define ‘excessive and unusual use’ to the ACCC’s satisfaction, the consumer watchdog said.

The ACCC said that businesses had agreed to delete or amend 79 percent of terms that the review had identified as unfair.

It said it was considering launching court action against non-compliant businesses, without disclosing names.