JTG toes the line but others may face ACCC court action

Issues & Trends – March 2013

JTG toes the line but others may face ACCC court action

AUSTRALIAN Competition and Consumer Commission chairman Rod Sims has singled out JTG as a company that responded positively to ACCC representations about contract terms.

But he said some businesses – including in the car rental industry – have not co-operated fully with the ACCC and may face court action.

Sims was speaking in Sydney at the ACCC’s annual National Consumer Congress where he unveiled the findings of the ACCC’s industry review of unfair contract terms.

Travel industry contracts were a major focus of the review which looked at the airline and vehicle rental industries as well as online traders and travel agents. (Other industries scru-tinised by the ACCC review included telecommunications and fitness.)

Sims told the congress that unfair contract terms used in standard form consumer contracts have been changed or removed in the wake of the review and engagement by the ACCC.

“The aim of the industry review was two-fold. First we wanted to evaluate compliance, and secondly work with business to achieve positive changes to standard form consumer contracts,” Sims said.

The ACCC identified eight types of terms which are of concern and invited businesses to change or remove them.

One of these was “terms that remove a consumer’s credit card chargeback rights when buying the service through an agent”.

Sims reported: “The ACCC found that in most cases, the particular businesses under review chose to make changes to their standard form contracts. Problematic terms were identified and either amended or deleted.

“I would like to highlight an example of a business that has done that in relation to one provision of a contract that was of concern to us.

“Earlier this year, the ACCC met with Jetset Travelworld Group regarding concerns raised about their consumer contracts.

“A term of their contracts essentially contained a no liability clause unfairly restricting consumer chargeback rights which are generally available to consumer purchases with credit cards.

“After raising our concerns, Jetset agreed to make the necessary changes to their consumer contracts.

“We are always pleased when businesses voluntarily change their business practices to make them fairer for their customers.”

But he continued: “Some businesses have not fully co-operated with the ACCC during the review or have chosen not to change their standard form contracts to address problematic terms.

“The ACCC is now considering whether further actions and in some cases the possibility of court action is warranted against businesses to deal with specific provisions still in use which it considers may operate unfairly.”

He warned that successful court action could result in companies being ordered to vary their contracts and refund money to customers.

“Any court order is also likely to damage the public perception of the business involved,” he added.

Indicating that the ACCC will now take a harder line with companies, Sims said the report marks the end of the compliance emphasis with the ACCC’s unfair contracts terms work and the transition to a more enforcement focused approach.

The ACCC also called on all businesses to consider the terms and conditions of their own standard form contracts in light of the ACCC’s findings, and to make changes where necessary to ensure their contract terms are compliant.

Sims said good contract terms offer an opportunity for businesses to deal up front with areas of consumer dissatisfaction and dispute, thereby reducing complaints.

National unfair contract terms were introduced as part of the Australian Consumer Law which came into effect on July 1, 2010 which enable a court to determine that a term of a standard form consumer contract is unfair and therefore void.

• Sims also spoke about the challenges in taking unconscionable cases to court.

“The ACCC has taken on a number of unconscionable conduct cases, some where we have been successful and few of late where we have been unsuccessful,” he said. “While disappointing, these unsuccessful cases will not deter us in taking action in future cases as we must seek to protect disadvantaged consumers.”

The ACCC currently has an action against Europcar Tasmania (BAJV Pty Ltd) alleging misleading and deceptive conduct and unconscionable conduct in relation to hire vehicle damage charges. The ACCC alleges that BAJV overcharged customers for damage sustained to its hire vehicles and subsequently did not refund customers the overcharged amounts.

The ACCC also alleges that BAJV managing director, Brendon Ayers, and fleet controller, Teressa Carr, were involved in the alleged conduct of BAJV concerning overcharging on hire vehicle damage.


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