Businesses on notice as ACCC accepts first…

The ACCC has accepted a court enforceable undertaking from Mable Technologies Pty Ltd (Mable), after it admitted to breaching the unfair contract terms (UCTs) provisions of the Australian Consumer Law (ACL). This marks the ACCC’s first UCT enforcement action under the expanded UCT regime which introduced civil penalties for UCT breaches in late 2023.

This undertaking offers businesses a timely insight into the types of terms that the ACCC is concerned about and what to avoid in standard contracts to minimise the risk of regulatory scrutiny.

What were the contract terms of concern?

Mable is an online services platform that connects independent support workers with clients. Users of the platform include National Disability Insurance Scheme (NDIS) participants, elderly persons, persons with disabilities, and support workers who operate as sole traders or small businesses.

Mable admitted to including several unfair terms within its terms and conditions (T&Cs), between 9 November 2023 and 22 August 2024. In line with the statutory test for ‘unfairness’, the ACCC focused on terms that created a significant imbalance between the contractual rights and obligations of Mable and its more vulnerable counterparties, and which were not reasonably necessary to protect Mable’s legitimate interests.

The terms of concern included:

(Deemed acceptance): A support worker’s timesheet was deemed to have been automatically accepted by the client if the client had not challenged it within 24 hours of its submission. Once deemed acceptance occurred, the client had no right to opt-out or dispute the invoice and payment was processed.
(Penalty): Platform users were required to pay Mable a minimum penalty fee of $5,000 if they provided, encouraged, solicited or failed to notify Mable of any “specified avoidance conduct”.“ For example, if a support worker left Mable but continued to provide services to a client who they had met through Mable within 12 months of leaving the platform, the support worker was liable to pay a penalty fee to Mable.
(Unilateral variation): Mable could unilaterally change its fees or T&Cs without providing a reasonable period of notice to its platform users before the changes took effect.
(Liability exclusion): Mable excluded its liability for any claim or loss incurred by a platform user related to their use of, access to, or transaction involving Mable’s platform. The terms limited Mable’s general liability to a refund of amounts paid by a platform user in the previous 12 months (platform users’ liability was uncapped).
(Indemnity): Platform users were required to indemnify Mable against all third-party claims in connection with the user’s use of the platform and Mable’s services and the provision of support services.

(Terms of Concern)

What did Mable undertake to do?

In addition to making the above admissions, Mable also either amended or removed the Terms of Concern and provided the ACCC with an enforceable undertaking where it committed to:

not including, enforcing or relying on any of the Terms of Concern;
clearly and prominently communicating any material terms to platform users prior to and during the sign-up process on its website; and
establishing and maintaining an ACL compliance program for three years.

What does this mean for your business?

1. Expect more ACCC UCT enforcement action

While this undertaking is the ACCC’s first publicly disclosed UCT investigation since changes to the law in 2023, and continues the ACCC’s recent ACL enforcement focus on the NDIS and aged care sector, it is likely that we will see further ACCC activity in other sectors in the future.

2. Extra care needed if your customers are vulnerable or disadvantaged

If your counterparty is vulnerable or disadvantaged, e.g. elderly, additional literacy or care needs, it is a factor that can increase the risk that a unilateral or non-reciprocal term may be an UCT. Regularly reassess whether terms are still ‘reasonably necessary’ to protect your ‘legitimate interests’ and consider options to redraft or remove unnecessary terms.

3. Time for a ‘health check’ on your standard form contracts

With UCTs remaining an enforcement priority for the ACCC, it is timely to do a broad review of your standard form contracts to check whether they are still fit for purpose. Check for any material terms that limit the counterparty’s contractual rights, including unilateral variation rights, automatic renewal, one-sided termination rights, unbalanced liability and indemnity regimes or penalty clauses. Consider rolling out targeted UCT compliance training to your business.