Cleanaway - Unfair Contracts And Scams.
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Case 1 - Cleanaway
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Original agreement as per contract
front page:
- Waste bin to be left on clients premises for 3
years
- A$24.00 collection fee when client calls
Cleanaway to collect bin
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Resulting charges and unexpected
results after 3 years:
- A$45.80 per collection.
- A$4.00 per week bin rental.
- A$5.00 per month admin fee.
- A$0.90 per collection fuel levy.
- Contract automatically rolled over after 3
years without contacting customer to ensure that a rollover was
required.
- A$350.00 fee charged to cancel the contract
during the 4th year.
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Contract clauses utilised by Cleanaway
to achieve above:
- Clause 3.3 We may vary a Rate at any time
during the Term and especially if:
(i) You exceed estimated weights or volumes
shown in the Form
(ii) the Environmental Protection Authority Levy
on Waste disposal changes; or
(iii) there are Changes to the Consumer Price
Index
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Analysis of the clauses:
- Clause 3.3 might just as well read "We may
vary a Rate at any time by any amount we feel like, without any reason
whatsoever". The phrase "especially if" means that whilst the
three situations given may be used as a reason to vary the rates, those
reasons do not have to be used at all. This clause gives Cleanaway absolute control of pricing.
- Cleanaway claim that the A$4.00 / week bin rental
is covered under clause 3.3 however this is not correct. The original
contract did not include a rental fee. By introducing a rental fee
Cleanaway are not "varying a rate" per clause 3.3. The
"Rate" is clearly stated in the original contract as
$24.00 per collection and Cleanaway have used this clause to increase
the rate by over 90%. The bin rental was introduced, and we do not
find any clauses in the Cleanaway contract which allow them to
"introduce" a fee other than the administration charge in
clause 3.7.
- Signing the Cleanaway contract opens the client
to Cleanaway imposing a discretional administration charge per clause
3.7. There is no cap on this charge and no requisite for Cleanaway to
justify the charge. Fortunately for the company who signed the above
contract Cleanaway only imposed an A$5.00 per month admin charge. They
could just as easily have imposed a $1,000 per month admin charge or
more.
- The "fuel levy" charge is also not
covered by the contract conditions, however most people would agree
that fuel prices have risen over the past 3 years and would not object
to paying the nominal "fuel levy" to help cover fuel
increases not foreseen when the contract was signed. Since the
addition of a fuel levy can be justified by the increase in fuel
prices, that leaves little to explain the over 90% increase in
collection charges and the addition of two other charges which were
not deemed necessary by Cleanaway when the contract was signed.
- The automatic rollover clause is legal in
Queensland and indeed all states of Australia. Victoria has passed
legislation to abolish these types of clauses in "consumer
contracts", but don't go as far as to make them illegal in
business to business contracts. We believe the European Union
legislates against these types of clauses in consumer and business to
business contracts, but we have not yet verified this. Whilst
the clause is legal, a more courteous approach would be to contact the
customer prior to rolling over the contract.
- Clause 4.4 - What damages? The contract above
already passed it's original expiry date, and if the client had
contacted Cleanaway in writing just 10 months earlier, Cleanaway would
have had to remove the bin from the premises anyway. Cleanaway got an
extra 10 months of business from the customer and chose to penalise
the customer to the tune of A$350.00. The real sting is that the
original agreement stated that the only charge would be A$24.00 when
(and if) the
customer called Cleanaway to collect the bin, but Cleanaway used their
introduced and increased charges in the calculation of the
cancellation fee .
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Contact with the Company:
- The company involved sent a letter to Cleanaway to advise their managers of the situation.
- A letter was also sent to the new owners of Cleanaway, Transpacific Industries Group Ltd to advise them of what their latest acquisition was doing.
- No response was received from Transpacific Industries Group Ltd.
- Cleanaway sent two representatives to meet with the company. The representatives made no attempt to explain how the above situation developed, no apology for the way Cleanaway was behaving and no offer to refund the "cancellation fee". According to the company, the Cleanaway reps seemed more interested in gathering information
as to what had alerted the customer to the introduced and increasing fees. No follow up reply was received after the meeting, so we must assume that no action has been taken by Cleanaway to resolve the issues.
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