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Small Business Commissioner David Eaton

Unfair contract terms: a win for small business

In a bid to protect small business from unfair contracts, the Australian Competition and Consumer Commission (ACCC) has been active in its pursuit of breaches of Unfair Contract Term laws, and has recently taken action against ATM provider Cardtronics.

ATM provider Cardtronics has recently admitted that its subsidiary, DC Payments, offered contract terms with small business that may be unfair under Australian Consumer Law.

ACCC Deputy Chair Dr Michael Schaper has confirmed that Cardtronics has given a court-enforceable undertaking to the ACCC to change terms that may be unfair for businesses under existing contracts.

“We considered Cardtronics’ contract had several unfair terms, including automatic renewal for six years, unilateral increase of fees, and the first right of refusal should businesses seek to change providers at the contract’s conclusion,” Dr Schaper said.

Small Business Commissioner David Eaton, pointed to research showing the positive effects for the economy when imbalances of power are addressed. “I am pleased to hear that the ACCC could set another example of fairness,” Mr Eaton said.

“We have seen some significant wins for small business with major companies now amending their standard small business contracts, however there is still a long way to go to stamp out the use of unfair terms in corporate Australia.

“It is encouraging to see the ACCC is successful in enforcing the new law and that they continue to take the appropriate action to ensure that small businesses are protected.”

This outcome is part of a wider ACCC review of small business contracts in a range of industries. As part of this review, the ACCC will continue to engage with a number of businesses to encourage compliance with the new unfair contract term provisions, which came into effect on 12 November 2016.

If a small business thinks a contract term is unfair, it should ask the provider to amend or remove the unfair term. If this is unsuccessful, a small business can:

  • Contact the ACCC (or ASIC if it relates to a financial service or product)
  • Seek assistance from the Small Business Commissioner by contacting us.
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