Company or individual details
- 1300 Australia Pty Ltd77 108 792 016
The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from 1300 Australia Pty Ltd (1300 Australia) in relation to possible unfair contract terms in standard form agreements used with small business customers. 1300 Australia supplies “phonewords” which are telephone numbers that also spell words on a keypad.
Since at least 12 November 2016, 1300 Australia has entered into or renewed contracts for the supply of phonewords to its customers that contain a number of terms that the ACCC considers may be unfair within the meaning of section 23 and 24 of the ACL. These terms are:
- an automatic renewal term providing for the automatic renewal of the agreement for 12 months terms, without 1300 Australia notifying the customer;
- a preservation of rights term requiring the customer to notify 1300 Australia of use by a third party of the phoneword;
- a termination term:
- permitting 1300 Australia to charge a termination fee that is no less than 92.5% of the amount of the fees due for the use of the phoneword during the remaining term of the agreement; and
- providing 1300 Australia with 30 days to rectify a breach of the agreement, before the customer may terminate the agreement, but only providing the customer with 14 days to rectify a breach of the agreement, before 1300 Australia may terminate the agreement;
- a late payment term permitting 1300 Australia:
- to charge the customer an administrative fee of an unspecified amount for late payment; and
- to terminate the agreement with 14 days’ notice in the event of a failure to pay any fee due under the agreement.
1300 Australia acknowledges that most of these terms may have contravened small business unfair contract term provisions of the Australian Consumer Law.
To address the ACCC’s concerns, 1300 Australia provided the ACCC with a section 87B undertaking that it will:
- conduct a review of previous complaints and refund excessive termination fees;
- amend current and future agreements to ensure:
- 1300 Australia cannot terminate a contract only due to a customers’ failure to notify them of a third parties use of a Phoneword;
- customers can terminate the agreement with 3 months’ notice, after the initial contract period, at no charge;
- termination fees are limited to 3 months’ fees under the contract, if the contract is terminated with less than 3 months notice after the initial contract period;
- customers have 30 days to rectify a breach of the contract before 1300 Australia can terminate it;
- the administration fee charged for late payment is limited to $25;
- 1300 Australia is required to give customers 30 days’ notice prior to a renewal;
- place a corrective notice on its website; and
- implement a compliance program.