3. Case Notes
The Complaint:
Three weeks after signing a two-year contract for an ADSL2 broadband internet service, the complainant was notified by email that the monthly price would be increasing. She asked the provider to let her out of the contract at no cost. The provider responded that:
The complainant rejected both the options but said that she was happy to pay the remaining cost of the modem, provided she could use it with other service providers. She said that she had subsequently learned that the retail cost of the modem had increased since she signed her contract and she would pay only the remaining cost of the modem as it was advertised when she signed up.
TIO Response:
The TIO formed the view that the ISP’s actions might breach the telecommunications industry’s self regulatory code on contracts, the Consumer Contracts Code. The code states that: a term in a contract would be regarded as unfair if the supplier unilaterally varied a contract without giving the customer the right to terminate the contract “without incurring charges other than usage or network access charges or any outstanding equipment or installation costs”.
In response to the TIO, the internet service provider said that it did not provide fixed term contracts, but “allows a customer to offset installation charges through the maintenance of their connection for a period of time”. It said that the $90 disconnection fee was a network access charge as it was a fee levied by the wholesaler to disconnect the customer from the ISP’s network and reconnect them to the wholesaler’s network.
The Outcome:
The TIO disagreed with the ISP, saying that the $90 was not a network access charge and was therefore not enforceable. It also said that the customer had signed a fixed-term contract. The ISP maintained its stance that the $90 was a network access charge, but said it would waive it in this case. The TIO said it would consider investigating future complaints against the ISP where a contract was varied unilaterally and the $90 fee was charged. The ISP said that if the customer paid a small cost she could keep the modem. The customer said by the time the case was resolved, she had been paying an increased rate for several months. The ISP said it was happy for this to go towards the pay-out cost for the modem and the case was closed.
