The Australian Communications Industry Forum (ACIF) today announced that it has released for public comment a new draft code regulating telecommunications contracts for consumers and small businesses.
The code, which is expected to be released for publication in early December, will address the "intelligibility and fairness of contracts for mobile, home and small business phone services as well as Internet services," the ACIF said.
The draft code applies to carriage service providers, including Internet service providers (ISP) and covers contracts for supply of telecommunications services, including fixed and mobile telephone calls and Internet services to residential and small business customers.
The ACIF said that current federal and state laws "do not identify or provide guidance on contract terms which may be unfair, nor provide guidance on the structure and format of contracts to ensure consumers can easily read and understand important contract terms".
While other ACIF codes cover the appropriateness of the behaviour of a supplier's sales staff in dealing with consumers, these codes "do not expressly deal with the fairness of the contract terms or the actual format of a contract to ensure it is readily accessible to and easily understood by consumers".
The code identifies and prohibits the use of "unfair terms by providing an objective basis for determining the circumstances in which a contractual term is unfair". This includes taking into consideration the legitimate rights and obligations of both consumers and suppliers.
The ACIF is expecting compliance with the code to "lead to a reduction in the volume of customer complaints and also contribute to customer confidence and build customer loyalty".
ACIF chief executive officer, Anne Hurley, said it was crucial that the Australian public took full advantage of the opportunity to review the draft code before it was finalised.
"A strong and viable Australian communications industry is only possible while it maintains the confidence and trust of its customers. Therefore consumers need to know they are entering into fair contracts when they sign up for telecommunications services," Hurley said.
The ACIF Working Committee, which has been developing the draft code over the past four months, is now seeking public comment before finalising its content.
The committee looked at similar codes already in place overseas and considered the issues relevant to the Australian telecommunications environment before drafting the new Consumer Contracts Code.
The draft consumer contracts code contains examples specific to the telecommunications industry which provide additional context and information about the practical effect of the rules. It also states the minimum requirements for the format and structure of contracts, as well as rules to promote the use of "plain language".
"ACIF plays a pivotal role in brokering an environment in which all participants in the industry have a voice. Through our working committees and other consultative groups, ACIF is helping the industry respond to consumer needs, such as contracts which are not only fair but are easily understood by those who use telecommunications services," Hurley said.
ACIF said that compliance with the code will require existing suppliers to review the terms of their existing contracts and all related documentation and modify these. In order to implement the modified contract terms, suppliers will also need to modify their processes and systems, as well as policies and operating practices and associated procedures, including staff education and training. New entrants will also need to ensure compliance with the code is built into their processes and systems.
"Implementation of the code will have a significant impact on some of the existing operating practices and procedures which will add major costs to the industry," ACIF said.
Hurley told ZDNet Australia that the cost would depend on the size of each company. She added that the ACIF will be holding a round table forum early next year "to get a sense of the degree of complexity" that the systems modification will require.
The public comment period for the draft code will end on 5 November.