While unfair contracts between SMEs and corporates have been in the spotlight recently, Advanced Hair Studio has been taken to task over unfair contracts with its own customers.
Advanced Hair was brought up in the ACCC for concerns that contract terms issued to customers of its Advanced Laser Therapy Program between April 2015 and June 2017 were unfair.
Of particular concern to the competition watchdog was a clause requiring customers to pay the entire cost of the program, regardless of whether they had attended the full number of included sessions.
“We are pleased that Advanced Hair has amended its contracts as a result and is offering part refunds to some customers,” said ACCC deputy chair Delia Rickard.
“The ACCC considers that this type of term in a contract, containing cancellation fees far greater than the cost to Advanced Hair of the early cancellation, is likely to be unfair under the Australian Consumer Law.
“All businesses should be aware that clauses like these which impose excessively high cancellation fees may amount to unfair contract terms as defined by the Australian Consumer Law.”
As part of a court-enforceable undertaking, Advanced Hair advised that it will refund 80 per cent of the total price, minus the fee for laser therapy sessions attended, to affected customers, and will also establish a consumer law compliance program.
The ACCC noted that Advanced Hair will not be subject to penalties or further action because of its co-operation in redressing the concerns raised – an important lesson for all businesses that find themselves approached by regulatory bodies.