Consumer NZ has launched a campaign to target the use of unfair terms in consumer contracts.
CEO of Consumer NZ, Sue Chetwin, said the “Play Fair” campaign has been launched to coincide with a ban on unfair terms which takes effect from today (March 17).
The ban on unfair terms is one of the most significant changes to NZ’s consumer law in the past 20 years.
Unfair contract terms relate to clauses in standard form consumer contracts. The main hallmarks of these contracts are that the terms have been offered to the consumer on a ‘take it or leave it’ basis, and the contracts relate to goods and services that are usually for personal use. From tomorrow, it will be unlawful to include an unfair term in a standard form consumer contract.
Commerce Commission chair, Dr Mark Berry, said businesses have had 15 months to prepare for the changes.
“We have taken steps to inform them of the laws, including by publishing our Guidelines last month. We will start targeting contracts in industries that have proven problematic overseas or where we have received complaints in the past,” Berry said.
The Commission will focus on terms that limit competition, such as automatic ‘rollover’ or renewal terms and terms that lock consumers into contracts that they wish to exit, preventing them switching to a competitor.
Chetwin said companies have been given generous notice of the ban to give them time to review their contracts and remove unfair terms.
“There’s little evidence this had happened. We’re launching our ‘Play Fair’ campaign to highlight companies which continue to use unfair terms despite the ban.”
Chetwin said these terms unfairly privilege the seller over the buyer. “They can include terms that give the company unilateral rights to vary the contract, the goods or services supplied, or even the price.”
Gym contracts will be one of the first targets of its campaign.
“Gym contracts can give the gym wide ranging rights to vary its services. But the rights available to the consumer may be extremely limited and costly to use,” she said.
In Australia, which introduced a ban on unfair terms in 2010, companies are now being taken to court over the use of these terms. A Federal Court ruling in 2013 forced an Australian telco to remove terms that gave it unilateral rights to cancel and to vary the price without allowing customers to opt out.
