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The ACCC (Australian Competition and Consumer Commission) has accepted a court enforceable undertaking from home builder Wisdom Properties Group Pty Ltd (Wisdom) to remove contract terms contained in its standard home building agreements that are unfair under the Australian Consumer Law.
From October 2008, Wisdom’s Home Building Agreement contained non-disparagement clauses that allowed it to control or prevent any public statements such as online reviews, made by customers about its services.
“Consumers are increasingly relying on online reviews when making purchase decisions and businesses must not prevent consumers from seeing genuine, relevant and lawful reviews by their customers through standardised contract terms,” ACCC Commissioner Sarah Court said.
“Any standard form contract terms that prevent or limit a customer from making public comments about goods or services are likely to be unfair under the Australian Consumer Law.”
Wisdom’s Home Building Agreement also allowed Wisdom to suspend a customer’s home construction and held customers liable for any losses resulting from public statements.
Wisdom relied on these unfair contract terms to stop reviews from being published on online review website, ProductReview.com.au.
Over 3000 Wisdom customers had the non-disparagement clauses included in their agreements. Wisdom has admitted that these were unfair and will not enforce the clauses in existing agreements. Wisdom will not include similar clauses in future.
“This outcome should serve as a warning to other businesses that imposing contract terms that prevent their customers from making public comments will attract ACCC attention,” Court said.
As part of the undertaking, Wisdom will also publish a corrective notice on its website, contact affected customers, and establish an Australian Consumer Law compliance program.
The undertaking is available at Wisdom Properties Group Pty Ltd