What is a contract?
A contract is a legally-binding document that commits you to buy services for a specified period of time. For mobile phones, this is often for 24 months but this can vary between providers.
There are a number of ways you can agree to a contract, including over the phone, in person at a store or by signing a contract. A provider is able to make changes to the contract as long as it gives you notice and the changes are not detrimental.
What should I know before I enter a contract?
If you are entering into a contract you should obtain a copy of the ‘Critical Information Summary’, which contains key information about the product and/or service you are planning to buy. Telco providers must also make the relevant terms and conditions of their services and products available on their website. Providers must also make their standard customer contracts available and supply a customer with a copy of the contract on request and at no charge.
You should also think about how you will use the service—for texting, voice calls, the internet—and choose what best suits your use. Further information is available on mobile reception and broadband speeds.
Read the Critical Information Summary and contract carefully to make sure you understand the terms and conditions you are signing up for.
Do I need to read the fine print?
Yes. The fine print contains all the specific terms and conditions of your contract. This will include important information about the obligations on you and your service provider for the duration of the agreement, such as how to end your contract, and what will happen if there are changes to your service. At a minimum, you should read and understand the information in the Critical Information Summary.
Can I end the contract early?
This depends on the contract. If you end the contract early it is likely that you will need to pay an early termination fee or an exit fee.
What is a Standard Form of Agreement?
A Standard Form of Agreement (SFOA) is a type of contract that sets out the terms and conditions of the product or service. SFOAs are used widely by providers for use with generic products and plans where a personalised customer contract is not necessary. You don’t need to sign an SFOA as it applies once you commence using the product or service. Providers are required to make SFOAs available and must provide a customer with a free copy on request. They must also publish all relevant terms and conditions for their telecommunications products on their website.
What if the contract is unfair?
Providers cannot put unfair terms into a contract. These include extending the term of the contract without agreement from the customer or making detrimental changes to the contract without providing notification and exit rights.
If you think your contract terms are unfair, you should contact the Australian Competition and Consumer Commission or the Telecommunications Industry Ombudsman as this may be a breach of the Australian Consumer Law or the Telecommunications Consumer Protections Code.
Is a pre-paid mobile still a contract?
Yes, but it usually means you are unlikely to be subject to conditions on the provision of the service, and you are not committed to stay with one provider for an extended period. If you buy a pre-paid mobile phone, it may be locked for use only on the network you bought it for so be sure to ask.