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Can I get out of my contract?

If you cancel your post-paid mobile phone contract before the term of the contract has finished, the phone company may ask you to pay a fee for “early termination” as set out in your contract. This is sometimes called an “early termination fee”.   In certain circumstances you may not have to pay this fee, so it is important to know your rights.  Generally, your rights come from a set of laws called the “Australian Consumer Law”.

Your rights when you cancel your mobile phone contract will depend on the reason you are cancelling your contract. 

·         If you are under 18 and you need to get out of your contract…

·         If you are cancelling because you are unhappy with the network… 

·        If you are cancelling because you are unhappy with your phone…

·         If you are cancelling for another reason….

·         What do I do to enforce these rights?

·         Can I get someone to talk to the phone company on my behalf?

I’m under 18 and need to get out of my contract...

If you are under 18, and you signed up to a mobile phone contract that you can’t afford, you may be able to get out of the contract without having to pay the early termination fee.

If you are under 18, the law says that you will only be held responsible for carrying out a contract, if the contract was made to buy ‘necessaries’  AND you were old enough to understand what the contract meant for you.

‘Necessaries’ includes things that a young person needs to live a reasonable lifestyle. It includes things like clothing, food, medicine, a place to live, school supplies and so on. Post-paid mobile phones are unlikely to be considered ‘necessaries ’.

 

If you are cancelling because you are unhappy with the network…

When you sign up for a mobile phone contract, the phone company promises that the network will be fit for obvious purposes (like making and receiving calls and text messages) and for any other purposes that you tell them that you want (like if you say you want to access the 3G network from your home).

If the network isn’t fit for these purposes, the law gives you certain rights.  But, exactly what your rights are will depend on how serious the problem is and whether it can be fixed easily.

If the problem CANNOT easily be fixed, it is a major problem and you CAN cancel your contract without paying an early termination fee. For example, if you told the phone company that you wanted to access the 3G network from your home, but after you sign up you find out the phone company does not have 3G coverage where you live, this would be a major problem and you can cancel your contract without paying an early termination fee.

If the problem CAN easily be fixed, then you generally DO NOT have the right to cancel your contract without paying the early termination fee. But, you DO have the right to ask the phone company to fix the problem and if they do not fix it in a reasonable time, THEN you DO have a right to cancel the contract without paying the early termination fee.

If your contract includes a mobile phone and you have the right to cancel your contract without paying an early termination fee, you must return the phone and the phone company must refund you any money you have already paid for the phone.

If you are cancelling because you are unhappy with your phone…

If your contract includes a mobile phone, the phone company promises that the phone will be of acceptable quality.  A mobile phone will be of acceptable quality if it:

·         - is fit for all the purposes that mobile phones are usually used for (e.g. calling, texting); and

·         - looks acceptable; and

·         - is free from problems; and

·         - is safe; and

·         - durable.

If the mobile phone isn’t of acceptable quality or isn’t fit for the purposes that you said you wanted it for, the law gives you certain rights.  But, exactly what your rights are will depend on how serious the problem is and whether it can be fixed easily.

If the problem CANNOT easily be fixed, it is a major problem and you can return the phone (called “rejecting” the phone) and cancel the contract without paying the early termination fee. For example, if you told the phone company that you wanted to take photos with your phone, and the phone company said your phone can take photos but after you sign up you find out the phone does not have a camera, this would be a major problem and you can reject the phone and cancel your contract without paying the early termination fee.

If the problem CAN easily be fixed, then you generally DO NOT have the right to reject the phone and cancel your contract without paying the early termination fee. But, you DO have the right to ask the phone company to fix the problem with the phone and if they do not fix it in a reasonable time, THEN you DO have a right to reject the phone and cancel the contract without paying an early termination fee.

If you are cancelling for another reason….

If you are cancelling because you have found a better deal, or you are moving overseas, or some other reason, it is less clear what your rights are. 

The law says that unfair terms in standard form contracts (like most mobile phone contracts) have no effect.  A term that penalises you (but not the phone company) for terminating the contract would be unfair. So, you MAY be able to terminate a contract without paying the early termination fee by arguing that the term in the contract that says you have to pay an early termination fee is unfair.

Examples of unfair contract terms in mobile phone contracts would include:

- a term that lets the phone company (but not you) terminate the contract;

- a term that lets the phone company (but not you) change the terms of the contract.

What do I do to enforce these rights?

If you think the law gives you the right to get out of your contract without paying an early termination fee, when you contact the phone company to cancel your contract, explain:

·         the reason why you are cancelling your contract;  and

·         that you think you should not have to pay the termination fees or charges because of your rights under the Australian Consumer Law.

If this doesn’t work, you could make a formal complaint and if that doesn’t resolve things, you could contact the Telecommunications Industry Ombudsmen.

You should know, if the phone company makes you another offer (like giving you a discount on your monthly repayment, or offering you a different phone) and you accept that offer, you may lose your right to cancel your contract without paying an early termination fee.

Also, even if you do not have to pay an early termination fee, you may have to pay a lot of money when you cancel your contract if:

·         you owe money for past usage; or

·         if you are keeping the phone and you have not finished paying for the phone.

I signed the mobile phone contract and I’m having problems that I can’t solve. Can I get someone to talk to the phone company on my behalf?

·         Yes!

·         You have the right to have someone else to speak with the phone company on your behalf. That person will be called your advocate.

·         The advocate has no power to act on your behalf and will not have access to your  information unless you give your permission first.


 Last reviewed June 2013