6 Sep 2016

Consumer contracts still unfair despite law change - expert

1:15 pm on 6 September 2016

A review of more than one hundred consumer contracts has found almost all of them contain terms that are unfair to consumers.


contract Photo: supplied

Five big power companies are having to re-write parts of their contracts after they were found to be doing things like charging higher prices without telling their customers.

That is despite a law change last year that banned such clauses.

The head of Auckland University's commercial law department, Alexandra Sims, carried out the review, and she told Nine to Noon the problem was widespread and consumers could not defend themselves.

"With an unfair contract term the only person or body that can actually go to court to get that term declared unfair is the Commerce Commission."

Ms Sims said it was incumbent on large companies to follow the letter of the law.

"If they can't comply with the law, then what hope have smaller companies to do that?

"It's very common for them to continue to have terms which state that the company, at any stage, can vary their terms and conditions. And of course, they can do that - but the customers can't.

"One of the energy companies has a term that says, if you come into a property and the previous occupant owed money, then you have to pay their unpaid bill in order to continue to receive services."

Ms Sims said New Zealand's law needs to be aligned with Australia's, which gave consumers the ability to take companies to court.