Telecommunication providers must be conversant with the fair-trading and consumer protection legislation of each state and territory, if they carry on, or intend to carry on, business in that state or territory. This is regardless of where the telecommunication provider is based.

The Victorian Fair Trading Act (1999) (“the Act”), amongst other things, promotes and encourages fair trading practices, competitive and fair markets, and consumer protection. In addition to state legislation, the recent registration by the Australian Communications and Media Authority (ACMA) of the Australian Communications Industry Forum’s (ACIF) Consumer Contracts Code (“the Code”) is another step towards ensuring that telecommunication providers prohibit the use of unfair contract terms when contracting with residential and small business customers.

Specific sections and clauses to be aware of Font size

Section 163 of the Act protects Victorian customers against unfair consumer contracts, stating that contracts must be easily legible, clearly expressed, and where the contract is printed or typed, in a minimum 10-point font. The Code also requires telecommunication providers take reasonable steps to ensure that the material terms* of the contract are in a minimum of 10-point font.

Cooling-off periods

The Act provides a 10-day cooling-off period for both door-to-door and telemarketing contracts. With door-to-door sales, the 10-day period commences from and includes the day on which the agreement was made. With telemarketing contracts, the time for the cooling-off period is from and including the day on which the consumer receives the agreement document and notices. If an agreement is cancelled during the cooling off period, the agreement is deemed to have been rescinded by mutual consent and the contract is void.

Rescission notices

The Act provides for particular requirements when telecommunication providers are engaging in door-to-door sales and telemarketing practices. Under the Act the telecommunication provider must provide a copy of the agreement (contract) and a notice that informs a customer of his/her rights to cancel the agreement (See s.61(1)(c) of the Act for Door-to-Door Trading and s.67E for Telemarketing.)

This notice must comply with Schedule 2 of the Act and advise the customer about his/her rights when rescinding the contract and how this document needs to be executed. If a rescission notice is not provided in accordance with the Act, then the period in which the consumer may cancel the contract is extended to six months from the date of entering into the contract.

Unfair Terms

Amongst other things, Part 2B of the Act provides that a term in a consumer contract is unfair if it causes a significant imbalance in the party’s rights and obligations. Such terms will be void in consumer contracts.

Consumer Affairs Victoria recently took action against AAPT in the Victoria Civil and Administrative Tribunal (VCAT), alleging AAPT’s mobile contracts contain unfair terms. This is the first substantial case considering Part 2B of the Act. The TIO will have regard to VCAT’s decision when considering complaints to this office.

*The 10-point font is not required for those parts of documents that are used for information-gathering purposes only - such as fields for name and address - provided the relevant part is in a legible font. Material terms relate to the substantive terms and conditions that make up the remaining parts of the contract that the consumer and supplier will be bound to.