Cardtronics has given a court-enforceable undertaking to the ACCC to change terms that may be unfair for businesses under existing contracts.
ACCC deputy chair, Dr Michael Schaper, said that balance is important.
“We considered Cardtronics’ contract had several unfair terms, including automatic renewal for six years, unilateral increase of fees, and first right of refusal should businesses seek to change providers at the contract’s conclusion,” he said.
“Business contracts need to balance the rights of each party to ensure they aren’t unfair, as smaller firms may not always be in a strong negotiating position.”
Cardtronic has co-operated with the ACCC’s investigation, and undertaken not to enforce unfair terms for all existing merchants, some of whom entered contracts six years ago.
“This undertaking is a great outcome for Cardtronics’ customers, as the unfair contracts protections for small business only became effective in November 2016,” Dr Schaper said.
While Cardtronics contracts will continue to be automatically renewed, the minimum notice to cancel will be reduced from six months to three months, and Cardtronics will provide written notice to customers five months before the end of the contract.
Previously, merchants had to keep track of automatic rollover dates more than five years after entering contracts.
Cardtronics must also provide written notice of any fee increase to customers and allow them to terminate the contract without penalty under a new contract term.
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 has been engaging with a range of businesses to encourage compliance with the new unfair contract term provisions.