Australian consumers and small businesses soon won’t have to suffer unfair or confusing contracts for phone or internet services because of a new code issued by the Australian Communications Industry Forum (ACIF), according to the industry body.

According to ACIF, this is the first time in the world that a code has been developed to stop a specific industry from imposing unfair or unintelligible contracts on consumers and small businesses.

ACIF estimates the Consumer Contracts Code will apply to more than 20 million contracts because most individuals and small businesses have multiple phones (fixed and mobile) as well as internet services.

The Code must now be registered by the Australian Communications Authority (ACA), which could then direct all telecommunications service providers to comply with its provisions or face penalties.

Because of the importance of the new Code to the community, ACIF has asked the ACA to expedite the registration process, which in the past has taken anywhere from a few days to six months or more. As the ACA has been closely involved in every step of the development of the Consumer Contracts Code, ACIF is hopeful that registration will occur quickly.

The ACA requested ACIF to develop the Consumer Contracts Code in response to complaints that the wording of many telecommunications contracts was too complex, legalistic or technical for the average person to understand.

The other major source of complaints was contracts that allowed service providers to vary terms and conditions after customers had signed up for a service but didn’t  offer them an opportunity to terminate the agreement.

Under the new Code, any consumer or small business contract for telecommunications services entered into after the date of registration of the Code must be made to comply within six months.

Existing contracts for fixed line phone services must also comply within that timeframe.

Where consumers have mobile phone or internet services without a fixed contract period, the provider must offer a new contract that complies with the Code.

ACIF will now focus its energies on bringing together the service providers (including Internet service providers) to discuss the changes required to ensure their contracts comply with the new code.

ACIF has recently appointed a Compliance Manager to drive compliance across all of its codes but the Consumer Contracts Code will be a high priority.

A related ACIF code regulating Customer Information on Prices, Terms and Conditions, is currently awaiting ACA registration.

ACIF is holding industry briefings in Sydney (March 17) and Melbourne (March 24) to focus on compliance requirements of both codes.