We’ve been looking at the topic of unfair contract terms in standard form consumer contracts, following ACCC’s challenge to telcos (and other industries) to delete them from their agreements. In this post, we de-bunk the myth that unfair contract terms are valid until a court makes a contrary ruling.
In response to ACCC’s line-in-the-sand report on unfair contract terms in standard form consumer contracts, TCPCode.com.au has explained why it’s words, not actions, that will attract ACCC’s attention in 2013. Now, we’ll explain why it’s unfairness, not the percentage of ‘affected’ customers that counts, as AAPT discovered in 2006.
As we’ve noted, the TCP Code bans unfair terms in standard form consumer contracts, and so does the Australian Consumer Law. It’s important to understand that you can’t justify or remedy an unfair term by saying, ‘We never/hardly ever use that term’ or ‘In practice, we enforce it in a balanced way.’ The way the law is written, it makes no difference whether a single customer was ever actually prejudiced by an unfair term. It’s the potential for harm that’s the problem.
ACCC reiterated this point in its 2013 Report on Unfair Contract Terms.
The Australian Competition and Consumer Commission has changed into enforcement gear regarding the anti-unfair contract terms rules in the Australian Consumer Law. Not only do the rules apply to telcos as part of the general law, but clause 4.5.3 of the TCP Code also requires that ‘a Supplier will not include terms which would be Unfair in its Standard Form Customer Contracts under the law.’ So these kinds of terms breach both the Code and the ACL.
So service providers need to be aware of ACCC’s new drive to delete unfair terms in telco contracts.
Only 24% of telcos scored an ‘all clear’
In the first week of March, the Australian Communications and Media Authority carried out Critical Information Summary (CIS) audits of 50 telcos. 76% of them scored fail grades and received letters from ACMA requiring compliance. So there’s work to be done by the industry in this key area.
But the news is not all bad, according to ACMA consumer interests section manager Alan Chalmers.
Sixteen days after TCPCode.com.au reported that the Australian Communications and Media Authority was blitzing telcos over the new requirement for a Critical Information Summary for every ‘Offer’ they make, the authority has confirmed what we were seeing in the wild, in a blog post bluntly titled ‘Our Critical Information Summary blitz‘.
The post refers back to last year’s feisty statements by ACMA Chairman Chris Chapman and General Manager Jennifer McNeill, when the assured the industry that 2013 would see a more aggressive ACMA delivering ‘more investigations, more directions [to comply with the Code], more court cases’. Proving the point, the authority says it has just delivered its hundredth preliminary enquiry letter, meaning that in the order of 10% of the industry has been ‘touched’ by the regulator so far.
Communications Compliance Ltd, the TCP Code monitor, has announced a grace period for online lodgement of mandatory annual compliance documents by telcos. The due date of 1 April will be extended to 14 April.
This looks like a CommCom initiative to allow a little latitude as telcos come to grips with the Code and its annual ‘Compliance Attestation’ for the first time. And ACMA, the Code enforcer, has certainly not announced any Code compliance moratorium, so telcos shouldn’t think that the Code has ‘gone away’ even temporarily.
21 March 2013: Just 14 working days before telcos must file their first TCP Code Compliance Attestation. If you think you’re now fully compliant with TCP Code requirements, why not complete your Customer Information Compliance Statement right now, so you can transfer the info onto the Comms Compliance website easily by the end of the month?
If you don’t think you’re TCP Code compliant …
The Australian Communications and Media Authority describes new Code monitor Communications Compliance as the industry’s way to ‘demonstrate its compliance with the TCP Code’ and warns that ‘ACMA will use its investigation and enforcement powers if participants do not comply with the new Code obligations.’
In other words, ACMA is looking to Communications Compliance to provide the industry’s proof of the pudding when it comes to TCP Code compliance. If telcos are serious about their commitment to a new reality — because that’s what the TCP Code demands — they’ll witness that via their own industry’s code monitor. The implication is that if telcos don’t take Comms Compliance seriously, they don’t take the Code seriously.
ACMA’s Jennifer McNeill
To understand ACMA’s attitude to the TCP Code, Communications Compliance and industry self-regulation, it’s worthwhile reading a punchy speech given by ACMA General Manager Jennifer McNeill when the Code was launched.
The TCP Code has special rules for Urgent Complaints, as defined by the Code. When ACMA does a complaint handling audit, one of its main interests is whether a telco knows what an ‘Urgent Complaint’ is, and identifies them promptly, and actions them in accordance with the Code timeline and rules.
So what is an Urgent Complaint?