The Federal Court has found hair loss business Ashley & Martin’s terms in three standard form contracts with consumers are void because they were unfair.
From June 2014 until at least June 2017, Ashley & Martin signed up more than 25,000 customers to its ‘Personal RealGROWTH Program’ using three different standard form contracts which have all been found to contain unfair terms.
Customers were typically signed up to a 12-month Ashley & Martin program by a sales consultant, and the unfair terms required consumers to pay for all of the medical treatment before they received, or could properly consider, medical advice.
Under one of the terms found unfair by the Court, consumers who wished to terminate the contracts more than 2 days after they accepted the program and consulted with a doctor were required to pay 100% of the total price payable.
As a result, the unfair terms could have caused consumers to lose hundreds or thousands of dollars if they left the program after considering medical advice or developing side effects to the treatment.
“Ashley & Martin’s terms meant consumers were penalised for stopping their hair loss treatment even if they developed an adverse side effect to the medication,” ACCC Commissioner Sarah Court said.
“Consumers should be allowed a fair opportunity to fully consider the treatment program and medical advice when they sign up and not be penalised for exiting a treatment plan if necessary.”
“The ACCC is committed to taking action against businesses that seek to impose unfair contract terms and we welcome the Government’s commitment in March this year to consult on options to strengthen protections for consumers,” Ms Court said.
Under the Australian Consumer Law as it presently stands, it is not illegal for businesses to include or rely on an unfair contract terms against consumers.
Currently, although courts can declare unfair terms to be void and consequently unenforceable, they cannot impose penalties on companies using these unfair terms.
The ACCC will be seeking an order for consumer redress and costs at a later date to be set by the Court.
Background
The ACCC first took action against Ashley & Martin in November 2017.
Ashley & Martin is an Australian company that provides hair loss treatment programs and hair replacement services to customers through its clinics in Australia, New Zealand and Singapore.
The ACCC’s guidance on unfair contract terms for consumers can be found here: Unfair Contract Terms
