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Understand your telecommunications contract

When you buy a new mobile, internet or landline service, make sure you understand what you are signing. A contract is a legal document.

Definitions

Contract

A contract is the legal agreement between you and your telco. For example, it explains:

  • the quality of the products or services you are buying
  • what the contract includes and excludes, limits or restricts
  • all fees and charges and how long you agree to pay for
  • what happens when you decide you no longer want those products or services
  • anything else you, or the telco, have to do

You are entering a contract if you:

  • sign a contract document
  • agree to the contract over the phone
  • agree to the contract in person, such as in a store or shopping centre

Standard Form of Agreement

Where the terms and conditions are the same for every customer, a telco may use a Standard Form of Agreement (SFOA). They may also call it a 'standard form contract'.

You don't need to sign an SFOA. This type of contract starts automatically once you start using the product or service. If your telco is using an SFOA, they must publish a copy on their website and give you the document if you ask, for free.

Guarantor

Sometimes, the telco may ask you for a guarantor. This is a person who guarantees that you can meet your contract agreements, such as paying bills on time. The guarantor signs a contract on your behalf and is responsible if you break the contract.

It is important the guarantor also understands what they are signing.

If your guarantor signs the contract, they have a 10-business-day cooling-off period. In this time, they may change their mind about being the guarantor.

Before you agree to a contract

Read everything carefully, including the fine print, before you sign or agree to a contract:

  • Think about how you need to use the service for texting, voice calls, the internet.
  • Compare prices and features so you know what different products or services can do.
  • Read and keep the Critical Information Summary. This document contains important details about phone and internet services. Telcos have to give you a copy and publish it on their website.

Prepaid mobiles still have a contract. Sometimes prepaid phones are locked to one network, so check if you can change networks.

If you need help finding a new mobile service, get more tips:

What to do if you change your mind

After you sign the contract, you can only change your mind in a couple of situations.

You can change your mind if the contract includes a ‘cooling-off period’. To find out if a cooling-off period applies:

  • check your contract
  • check the Critical Information Summary
  • check the telco's website

You have a 10-day cooling-off period if a salesperson approaches you without an invitation:

  • at your home or business
  • over the phone
  • in a public place, such as a shopping centre

This is an ‘unsolicited consumer agreement’.

Changes to a contract

Once you have signed a contract, your telco can only make changes to the terms and conditions if:

  • they tell you before making the changes
  • the changes will not have a negative effect on you

The variations might relate to:

  • ending the contract early
  • giving a product back within a specified period
  • paying a minimum amount
  • changing the network they use  

End a contract

The length of a contract varies, for example there are:

  • 12-month contracts
  • 24-month contracts
  • 'no lock in' contracts that work on a month-to-month basis

If you want to exit early, check your contract to see what you have to do. You may have to pay:

  • a fixed fee for ending your contract early
  • a fee that varies based on how long is left on your contract

Once your contract expires, you can continue to pay and stay on the same plan. This isn't always the best option and you may want to choose a new mobile service.

Complain about an unfair contract

Telcos cannot put unfair terms into a contract. Unfair terms include:

  • making the contract longer without your agreement
  • making changes that have a negative effect on you, without telling you your rights

The Telecommunications Consumer Protections Code and Australian Consumer Law protect you.

If you complain to your telco and you are not happy with the outcome, you can also complain to the telecommunications ombudsman.

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