Tyco Australia Group Pty Limited

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Tyco Australia Group Pty Ltd, trading as ADT Security (ADT) following concerns raised by the ACCC in relation to:

1. false and misleading representations made to certain customers who had terminated their contracts with ADT;
2. unfair contract terms in its standard form Customer Service Agreement (Agreement); and
3. inadequate disclosure of Exit and Decommissioning Fees payable by customers on exiting their Agreement.

ADT provides security services to residential and commercial customers including the installation and monitoring of security and fire alarm systems.

ADT’s Agreement allows customers to terminate their contract after the initial term (usually 36 months) by giving ADT 30’s day written notice. However, ADT continued to invoice some customers after the 30-day notice period had expired.

Additionally, clauses in the Agreement allowed ADT to vary the terms of the Agreement (including fee amounts) after the first 12 months of the initial term which required customers to either:

1. accept the variation or the fee increase, or
2. terminate the Agreement early and pay ADT an exit fee.

ADT has admitted:

1. by continuing to invoice customers who had terminated their Agreement ADT is likely to have made false or misleading representations that it had a right to payment for services, in contravention of sections 18 and 29(1)(m) of the ACL; and
2. certain terms permitting ADT to unilaterally vary the terms of the Agreement or increase the fees payable under the Agreement were, or were likely to be, unfair within the meaning of section 24 of the ACL.

ADT has undertaken to, among other things, refund affected customers, improve its customer service practices to prevent similar conduct from occurring in the future and remove or amend the unfair contract terms in its Agreement.