ACA tackles unfair clauses in industry code

The Australian Communications Authority (ACA) says it wants to abolish "unfair" contract clauses with its new telecommunications industry code. The ACA claims some of the terms that exclude companies from liabilities are impinging on consumers' common law rights.

The Australian Communications Authority (ACA) says it wants to abolish "unfair" contract clauses with its new telecommunications industry code. The ACA claims some of the terms that exclude companies from liabilities are impinging on consumers' common law rights.

The Australian Communication Industry Forum (ACIF), along with the ACA and a committee of industry and consumer representatives, are preparing a draft of the code for public viewing in October, with the ACA saying the code is likely to be enacted by mid-2005.

The ACA says abolishing liability exclusion clauses is one of the "key areas" for regulators, as they say the clause allows companies to neglect their consumer responsibilities.

Kathleen Silleri, ACA manager for codes and consumer safe guards, says exclusion clauses are common and gives the example of a customer who is asked to sign a contract that states the company is not responsible for damaged property during an installation process.

"Some even restrict customers to certain state jurisdictions," said Silleri, adding "They cannot exclude that right from you. Its just not reasonable, fair and it's certainly not balanced"

Silleri says that most telecommunications companies are guilty of using such clauses, stating that "they all have work to do".

A report commissioned last year by the ACA on the conduct of the telecommunication industry found that a number of clauses breached the "unfair terms provisions" of the existing voluntary ACIF guidelines, established in December 2002.

The ACA says it aims to make contracts fairer, more transparent and readable with the mandatory telecommunications code.

In terms of enforcement capabilities, the ACA says it can take steps through the Federal Court to ensure industry compliance. However, Silleri says it's unlikely to get to this stage.

"There are a large number of industry participants and an equal number of consumer representatives so we expect a high level of commitment from them in following the code," said Silleri.

Silleri says that the new code may be very similar to the 2002 guidelines established by the ACIF.

The original ACIF guidelines state that a contractual term may be unfair if it "causes a significant and unreasonable imbalance in the parties' rights and obligations arising under the contract", and also if it excludes or limits the "legal liability of a supplier in a way that is contrary to law".

Silleri says that in relation to these terms the report commissioned last year found the industry to be "largely non-compliant".

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