Services provided to minors

Table of contents

Introduction

The Telecommunications Industry Ombudsman (TIO) investigates complaints about the use of telephone or internet services by minors.

In the TIO’s experience, such complaints generally involve one of three situations:

1. A minor enters into a contract for provision of a telephone or internet service.
2. A minor requests provision of a third party service, and the charges for this service are billed to their own telecommunications service.
3. A minor requests provision of a third party service, and the charges for this service are billed to a third party’s telecommunications service.
   
   

Third party services Consumers are able to use their telecommunications services to purchase content and other services provided by a third party service provider. Charges for these third party services are generally billed via the service through which they are obtained. Examples include: using a landline or mobile telephone service to access information / entertainment services via a voice call to a 190x number, using a landline telephone service to access visual entertainment services on the internet via a data call to a 190x or international number or, using a mobile telephone service to access premium mobile services such as ring-tones, chat services and mobile TV.

Consumers who lodge such complaints generally seek to have charges waived and/or the contract for the telecommunications service cancelled.

When the TIO investigates a complaint involving a minor, we take into account the law, good industry practice and what is fair and reasonable in all the circumstances of the particular complaint.

In addition, each of the above situations raises different issues and we cover these in turn below.

1. A minor enters into a contract for provision of a telephone or internet service

   In some complaints, the main issue is whether a contract entered into by a minor for the provision of a telecommunications service can be enforced against them. These complaints may be made by parents, who may claim that their child should not be held liable for a service the child arranged because their child was too young to have entered into a contract.

   When we consider whether a contract is enforceable against a minor, we take into account relevant State or Territory laws. With the exception of New South Wales, these laws are based on the underlying assumption that a contract cannot be enforced against a person under 18 unless the contract is for “necessities”.

   On this basis, when we investigate complaints about the validity of a contract for a telecommunications service we will consider whether it was for the provision of a “necessity”. To help us decide this, we will collect information about:

   • the nature of the telecommunications service
   • patterns of usage associated with the service
   • the minor’s age
   • the minor’s social and economic circumstances, including their means, occupation and income, and
   • whether the minor has previously been supplied with similar goods or services.

   If the information we collect indicates that the contract was for the provision of a “necessity”, we will usually consider the contract to be binding on the minor. At this point it may be appropriate to consider the TIO’s other position statements on contracts and credit management.

If the information we collect indicates that the contract may not have been for the provision of a “necessity”, the contract is likely to be unenforceable. In such cases, we would generally expect a provider to waive relevant charges and cancel the contract without penalty.

New South Wales

The situation is different in New South Wales, where the general rule under the Minors (Property and Contracts) Act 1970 is that a minor who enters a contract is bound by it if the contract is for the minor's benefit.

On this basis, if the contract was formed in NSW, the TIO will consider whether the contract for the telecommunications service was for the minor’s benefit. Specifically, we seek to establish whether in using the service the minor has profited, gained or received an advantage from using the service, e.g. the minor uses the service for educational purposes.

To help us decide whether a service is for a minor’s benefit, we will collect information about:

• the nature of the telecommunications service
• the minor’s reasons for obtaining the service
• the patterns of usage associated with the service
• the minor’s social and economic circumstances, and
• whether the minor has previously been supplied with similar goods or services.

If the information we collect indicates that the contract was for the minor’s “benefit”, we will usually consider the contract to be binding on the minor. At this point it may be appropriate to consider the TIO’s other position statements on contracts and credit management.

If the information we collect indicates that the contract may not have been for the minor’s “benefit”, the contract is likely to be unenforceable. In such cases, we would generally expect a provider to waive relevant charges and cancel the contract without penalty.

2. A minor requests provision of a third party service, and the charges for this service are billed to their own telephone or internet service

   In some complaints, minors dispute charges for third party services billed to their phone or internet service.

   Minors’ reasons for disputing such charges vary, and may include claims that:

   • they did not use the service
   • the service cost more than they expected, or
   • they did not know they would be charged for an ongoing subscription service.

If a minor has:

• used their own telecommunications service to purchase third party services, and
• the charges for those services are billed via their telecommunications service,

the TIO will consider whether the contract for the purchase of those services is legally enforceable.

We will use much the same approach set out in the section above to establish whether the contract was for the provision of a “necessity” or, if the contract was formed in NSW, whether it was for the minor’s benefit, .

We will investigate the validity of the contract for the purchase of third party services separately from any assessment of the contract for the telecommunications service, and regardless of whether we form the view that the contract for the telecommunications service is enforceable.

We will also take into account other factors including:

• industry regulations, e.g. the Mobile Premium Services Scheme & Guidelines, and
• what is fair and reasonable in all the circumstances, having regard to the age of the complainant and their ability to comprehend the terms and conditions of the service requested.

If the available information suggests that the contract entered into by the minor is likely to be enforceable, we will usually consider the contract to be binding on the minor. At this point, it may be appropriate to consider the TIO’s position statements on contracts and credit management.

If the available information suggests that the contract is likely to be unenforceable, we would generally expect a provider to waive relevant charges and cancel the contract without penalty.

3. A minor requests the provision of a third party service, and the charges for this service are billed to another person’s telephone or internet service

   In some complaints, an account holder of a telecommunications service claims that a minor used a telecommunications service contracted to the account holder to request the provision of third party services. It is not uncommon for the account holder to claim that they had no knowledge of this and/or that they did not consent to the request.

   Parents, guardians or other persons over 18 may purchase telecommunications services in their own name with the intention that a child will be the sole or primary user of the service. In general, the account holder is liable for any charges incurred. See TIO position statement, Liability for charges incurred by third parties.

   However, where a complaint involves claims that a minor requested third party services without the knowledge or consent of the account holder, the TIO will seek to establish whether in all the circumstances it is fair and reasonable for the account holder to be liable for the resulting charges. The questions we seek to answer when investigating and assessing the complaint include:

   • What evidence exists to support the account holder’s claim that a minor is the sole or primary user of the service?
   • What evidence exists to support the account holder’s claim that a minor used the telecommunications service to request the third party service?
   • Did the account holder expressly or impliedly consent to the use of their telecommunications service for the third party service in question?
   • If the account holder so consented, were they aware, or ought they reasonably to have been aware, of the cost and nature of the service being requested by the minor?
   • Is it possible for the account holder to limit access from the telecommunications service to third party services? If so, what are those options and was information about those options readily accessible to the account holder before the third party service in question was requested?
   • Was the third party service specifically targeted at users under 18 years? If so, did advertising describe the cost and terms of the service in a way that a typical user within that target group would understand?
   • Did advertisements for the third party service advise the user to seek permission from the account holder before they requested the service?
   • If the content is classified as content that can only be requested and used by persons over 18, does the content provider have adequate processes in place to verify the age of the person requesting and using the service.

After investigating and assessing a complaint, the TIO may decide that it is not fair and reasonable for the account holder to be held liable for some or all the charges incurred by a minor’s use of a service. In such cases, we would generally expect the telephone service provider to organise for the relevant content charges to be waived.

The TIO may decide that some or all of the charges are payable by the account holder. At this point it may be appropriate to consider the TIO’s position statements on credit management.

Last updated: 20 November 2007
Old name: Young people entering into mobile contracts