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Topic # 191605 10-Feb-2016 09:44
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Just received. The report is here.

 

According to the list on page 9, the following telcos had some terms considered "unfair":

 

  • CallPlus (1)
  • Flip (5)
  • Orcon (5)
  • Vodafone (5)
  • Spark (9)
  • Two Degrees (7)
  • MyRepublic (34)

MyRepublic said "[it] had overlooked reviewing its contracts in light of the new laws. MyRepublic said that this was an oversight, as it had been focussing on the developing of its newly-created business. MyRepublic undertook to take immediate steps to review its contract. "

 

 

Commission releases report on unfair contract terms in the telco sector
The Commerce Commission has today released a report detailing the findings of its review of standard form consumer contracts in the telecommunications sector. The review was completed to assess the sector’s compliance with the unfair contract terms provisions of the Fair Trading Act introduced in March 2015.

 

The unfair contract term provisions are designed to protect consumers from contract terms that create a significant imbalance of rights or obligations between the company and the consumer.

 

After the new provisions were introduced the Commission launched a project to review a range of standard form consumer contracts for unfair terms. Commissioner, Anna Rawlings said the telecommunications sector was chosen as its first focus for two reasons. “Overseas regulators told us in their experience it was an industry in which potentially unfair terms were common. In addition, many of the past complaints we had received about unfair contract terms related to telecommunications contracts.”

 

As part of the project 19 separate standard form contracts from 7 different companies were reviewed.

 

“The majority of telco companies had made real efforts to comply with the provisions before they were introduced. However, we did identify 66 terms that we considered potentially unfair. Many of the terms were common across the contracts, particularly those that limited the liability of the company, allowed the company to unilaterally vary the contract or made the customer responsible for unauthorised charges,” Ms Rawlings said.

 

In some instances the companies were able to provide information to the Commission to show that the term was necessary to protect the legitimate business interests of the company. In all other cases, the companies accepted the Commission view and have amended or agreed to amend the terms concerned.

 

“This is a great outcome for New Zealand consumers. Most New Zealanders have one or more standard form consumer contracts with a telecommunications company and they can now be more confident about the fairness of those contracts. We were pleased that the telco companies were receptive to our concerns, amending or agreeing to amend the majority of terms, avoiding the need for the Commission to consider court action,” Ms Rawlings said.

 

All companies have been issued with compliance advice letters from the Commission reminding them of their obligations under the law and cautioning them to ensure their standard form contracts remain compliant with the law.

 

The Commission has also focussed on contracts in the electricity retail, credit and gym sectors and expects to report on these industries later this year.

 





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  Reply # 1489695 10-Feb-2016 12:43
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they overlooked the law change?

 

Wow.


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  Reply # 1489746 10-Feb-2016 13:38
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I recall reading when this law came in, that telcos in particular were warned about their  contract terms. Would be interested how they consider limiting liability unfair.


 
 
 
 


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  Reply # 1489793 10-Feb-2016 15:25
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The problem I see is, that what is 'unfair' is very subjective. So there is no real way to know if a clause is unfair or not, as what is unfair to one person may  be fair to another. That is possibly why so many ISPs are affected.


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  Reply # 1489868 10-Feb-2016 17:29
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mattwnz:

 

The problem I see is, that what is 'unfair' is very subjective. So there is no real way to know if a clause is unfair or not, as what is unfair to one person may  be fair to another. That is possibly why so many ISPs are affected.

 

 

 

 

If you'd read the Commission's report, you'd find out that many of the terms that were in the Commission's view unfair were clauses like:

 

 1. One-sided limitation of telco's liability

 

2. Clauses that allowed a telco to increase prices/materially altered the terms of the bargain within a fixed term contract without providing the consumer the right to exit such contracts without penalty.

 

I work in risk and compliance and this is the kind of stuff I look at every day. Any in-house lawyer or people working in risk who doesn't understand that clauses like the above are bad news, new laws or not, aren't just incompetent. They are literally a risk to the company. 

 

 

 

Edit: The Commission now says all the offending clauses have either be changed or been sufficiently justified as being reasonably required. Here's hoping they are right. IMO, they were remarkably soft on MyRepublic especially, given its clearly appalling attitude towards legislative compliance.

 

 

 

 

 

 

 

 

 

 

 

 


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  Reply # 1490051 11-Feb-2016 00:32
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Edit: The Commission now says all the offending clauses have either be changed or been sufficiently justified as being reasonably required. Here's hoping they are right. IMO, they were remarkably soft on MyRepublic especially, given its clearly appalling attitude towards legislative compliance.

 

 

 

^ unless MR try and enforce these unfair terms why would the Commission not take a soft approach? just having the terms there isn't harming anyone (as far as i am aware).


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  Reply # 1490524 11-Feb-2016 15:34
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sorceror:

 

^ unless MR try and enforce these unfair terms why would the Commission not take a soft approach? just having the terms there isn't harming anyone (as far as i am aware).

 

 

 

 

This is just my own opinion as a lawyer and risk/compliance guy. I regard it as reprehensible that a company purports to be ignorant of the law and ignorance of the law is no defence. At a minimum, there should be a specific press release shaming MyRepublic for its poor attitude towards consumers.

 

 

 

 


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  Reply # 1491406 12-Feb-2016 21:22
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What changed under the law? What specific things did they change?
I should probably go over ours and check it complies.

 

Though im pretty sure our contract is pretty good. We dont have anything like "unexpected charges must be reported to us within 60 days otherwise they stand" bla bla bla.

 

Our contract is also pretty long - 8 pages. But it goes into a good deal of force majeur and similar sorts of situations and fully describes what happens in various situations.





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  Reply # 1491469 13-Feb-2016 01:20
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Good that they will be reviewing gym contracts. One that I used to be on said that I had to keep paying the membership fees even if the gym closed down.








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  Reply # 1491576 13-Feb-2016 12:55
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Aredwood:

 

Good that they will be reviewing gym contracts. One that I used to be on said that I had to keep paying the membership fees even if the gym closed down.

 

 

That's nasty and probably wouldn't hold up in any court.





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  Reply # 1491584 13-Feb-2016 13:26
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Aredwood:

Good that they will be reviewing gym contracts. One that I used to be on said that I had to keep paying the membership fees even if the gym closed down.



I recall that example has been on fair go, and the gym closed down, but had another branch across town. But the person said it was too far to travel to. Obviously it needs to be in a convenient location. But it is still open to someone judging if it is fair or not. People can't just say a clause is unfair, just because they don't like the clause, as they aren't qualified to determine that.

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  Reply # 1491716 13-Feb-2016 19:05
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What if the gym was operating through a finance company?





Ray Taylor
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  Reply # 1491769 13-Feb-2016 20:04
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raytaylor:

 

What changed under the law? What specific things did they change?
I should probably go over ours and check it complies.

 

Though im pretty sure our contract is pretty good. We dont have anything like "unexpected charges must be reported to us within 60 days otherwise they stand" bla bla bla.

 

Our contract is also pretty long - 8 pages. But it goes into a good deal of force majeur and similar sorts of situations and fully describes what happens in various situations.

 

 

Best to take some legal advice IMO. But as a starter, take a look at what the Commerce Commission has said:

 

http://www.comcom.govt.nz/fair-trading/fair-trading-act-fact-sheets/consumers-and-unfair-contract-terms/ 


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  Reply # 1491887 14-Feb-2016 02:41
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mattwnz:

 

I recall reading when this law came in, that telcos in particular were warned about their  contract terms. Would be interested how they consider limiting liability unfair.

 

 

So you are effectively reselling access to other networks (ie an "internetwork") and faults on networks do happen. A server malfunctions or a router starts dropping packets. One of your upstream links goes down or a datacentre somewhere in America has an outage that cuts internet for some of your customers. A rat chews through the Chorus backbone fibre between Auckland and wellington on the same day as a farmer hits Chorus other backbone fibre digging fence post holes (it did actually happen, knocked out both phones and internet for a whole day). A customer has frequent but intermittent problems likely caused by a dodgy modem thats hard to troubleshoot, and wants you to pay $100 an hour for his time doing normal troubleshooting. Some financial guru claims that your outage cost him a million dollar deal and he wants compensation for lost income. A lazy bum argues that he shouldn't pay for anything at all since his bittorrent is slow at downloading movies.

 

 

 

There is absolutely no way that an internet provider should be liable for losses caused by faults or simply by the nature of internet. Its a low margin game and consumers never pay for super reliable networks despite expecting 100% uptime.





Qualified in business, certified in fibre, stuck in copper, have to keep going  ^_^

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