Telco, Exetel will compensate consumers affected by changes made to its fixed term residential broadband plans, after concerns were flagged by the ACCC.
In mid-2015, Exetel wrote to more than 2,000 residential broadband customers on 12-month fixed term plans, informing them that they were required to either change their broadband plan or terminate their Exetel service without penalty. It relied on a clause in its standard residential broadband agreement which meant it could vary any part of that agreement for any reason.
Following an investigation, the ACCC considered that the clause was an unfair contract term which was likely to contravene Australian Consumer Law.
The watchdog also considered that Exetel’s advertising of these fixed term plans was likely to be misleading because it represented that consumers would receive the service for the 12-month fixed term, when this was not the case.
“The ACCC considers that contract terms which allow a supplier to unilaterally vary the agreement for any reason are likely to be unfair. The ACCC will also be writing to other telecommunications providers with similar outdated terms in their consumer agreements, to put them on notice of the ACCC’s concerns and encourage them to review and update their standard agreements,” ACCC acting chair, Dr Micahel Schaper, said.
“Telecommunications companies should also be mindful that from November 2016, the law will also protect small businesses from unfair terms in standard form contracts.”
In response to the ACCC’s concerns, Exetel has agreed to remove the clause from its residential broadband standard form of agreement; refund any additional monthly subscription costs incurred for the remainder of the fixed term by customers who changed to a new plan; and refund any activation charge previously paid by customers who terminated their Exetel service rather than change to a new plan.
Exetel CEO, Richard Purdy, apologised to customers who were impacted by the decision and it has already made a number of changes to address this situations including changes to its terms and conditions.
It also contacted affected customers and provided them with refunds.
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“All ISPs have been forced to react to the introduction of streaming services like Netflix which have fundamentally changed Australian internet usage patterns and spurred a large increase in data usage. Our strong network performance over this period reinforces the need to manage our network for the benefit of all customers," Purdy said in statement.
“We are pleased to have this matter behind us."