ByteCard Consumer Contracts Deemed “Unfair”
For the first time, the Australian Competition and Consumer Commission has taken legal action against a company based solely on the new unfair contract terms provisions of the Australian Consumer Law. The company, ByteCard Pty. Limited (also known as Netspeed Internet Communications), is facing allegations related to their standard consumer contracts stating that they contain unfair terms and should be declared void.
The alleged unfair contract terms enable ByteCard to alter their prices under existing contracts without allowing the customer the right to terminate the contract. The terms also require their consumers to pay an insurance fee under any circumstance, even if the contract hasn’t been violated or if damages were incurred by ByteCard themselves. The last contract term that’s been deemed unfair is that under the conditions, ByteCard is able to terminate the contract at any time, regardless of any cause or reason.
The Australian Competition and Consumer Commission is seeking declarations from the Federal Court that these contract clauses are unjust and the matter is listed for a scheduling conference on June 13, 2013.
The Commission undertook an industry review recently which took a closer look at consumer contracts and problems associated with them. To test whether any contract elements are considered unfair, it would have to cause a significant imbalance in the consumer’s rights and obligations under the contract. It would also have to be deemed unnecessary to protect the legitimate interest of the consumer under the contract. Finally, the contract would be deemed unfair if it could be proven detrimental to the consumer if the contract was applied to them.
If it’s found that ByteCard’s contract is guilty of these three elements, the company could face severe legal consequences.