Exetel is one of Australia’s leaner ISPs, with a long history of providing low-cost ADSL internet services to users that don’t require the full-service customer support of providers like Telstra or iiNet. It’s also had a history of telling its less profitable customers to leave and find another Internet service provider — and this tactic doesn’t always sit well with Australia’s consumer watchdog. According to the ACCC, Exetel told some of its fixed-term ADSL customers in mid-2015 that they would have to move a different plan or have their service terminated, breaching Australian consumer law.
In the middle of 2015, according to the ACCC, Exetel contacted over 2000 of its home broadband customers that had signed up to fixed 12-month contracts, telling them that they would have to change their broadband plan or have their service terminated without penalty. Exetel used a clause in its standard terms and conditions, saying that it could vary any part of that contract at any time, to justify its actions.
But the ACCC says the move was unfair, and in contravention of the Australian Consumer Law, being a term that allowed Exetel to unilaterally alter its agreement without penalty or justification. It has ordered the Aussie ISP to remove that clause from its contract, refund the monthly fees of any customers that switched to a new plan under the pretense, and refund the initial activation fees of any customer that chose to have their service terminated.
Other ISPs with similarly broad get-out clauses in their standard user contracts will be encouraged by the ACCC to revise their documentation. Exetel’s punishment seems relatively minor in light of the fact that the ACCC is able to apply penalties of $1.1 million per breach to companies that attempt to exclude consumers from their standard rights under the ACL.