Advanced Hair offers part refunds for unfair contracts

11 October 2017

Advanced Hair Studio Pty Ltd (Advanced Hair) will partly refund some customers who purchased the Advanced Laser Therapy Program between April 2015 and June 2017, following ACCC concerns that Advanced Hair’s contract contained terms that were unfair.

Advanced Hair supplies hair loss treatments and procedures including laser therapy as part of 3-12 month programs.

One of the cancellation clauses in Advanced Hair’s contracts required customers to pay the entire cost of the program even if they had attended only one or two laser sessions.

“The ACCC considers that this type of term in a contract, containing cancellation fees far greater than the cost to Advanced Hair of the early cancellation, is likely to be unfair under the Australian Consumer Law,” ACCC Deputy Chair Delia Rickard said.

“We are pleased that Advanced Hair has amended its contracts as a result and is offering part refunds to some customers.”

“All businesses should be aware that clauses like these which impose excessively high cancellation fees may amount to unfair contract terms as defined by the Australian Consumer Law,” Ms Rickard said.

Advanced Hair provided the ACCC with a court enforceable undertaking that it will:

  • refund 80 per cent of the total price, less $150 for laser therapy sessions attended, to affected consumers who entered into the program between April 2015 and June 2017 and who contacted Advanced Hair about cancelling after they started laser therapy sessions
  • establish an Australian Consumer Law Compliance Program.

The ACCC decided not to take further enforcement action as Advanced Hair cooperated and offered to provide redress to affected customers.   

Affected customers can find out more at Annexure E of the undertaking, which is available at: http://registers.accc.gov.au/content/index.phtml/itemId/1203948

Background

The unfair contract term provisions under the ACL came into effect on 1 July 2010. The ACL provides that a term of a consumer contract will be considered unfair if:

  • it would cause a significant imbalance in the parties’ rights and obligations under the contract
  • it is not reasonably necessary to protect the legitimate interest of a party to the contract (note that the party who would be advantaged by the term must prove that it is reasonably necessary)

it would cause detriment to a party to the contract if it were to be applied or relied upon.

Release number: 
MR 170/16
ACCC Infocentre: 

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