01 Jun 2005, 05:35:14 PM

Reporter: Miranda Miller

Unfair terms and conditions can turn a seemingly good purchase into a nightmare of extra expenses. Today Tonight looks at your rights against the big guys.

After putting her house up for sale, Selvana Michael took the family on a day out while the real estate agent had an "Open For Inspection" day.

When Selvana returned, she found the family's digital camera was gone. Despite being covered by her insurance company for theft, Selvana's claim was rejected on the grounds she had "invited" the thief into her home.

Tamika Fox was just six months into a 24-month mobile phone contract when her phone stopped working. With a 12-month warranty on the handset, the phone company sent it back to the manufacturer who claimed it was damaged by liquid.

So, with 18-months still left on her contract, Tamika had to pay over $400 with no phone to show for it.

Eliza Collier from the Consumer Law Centre says most contracts clearly favour the companies writing them. When you hire a car, go to the gym, or sign up to a video library, all of the contracts can contain terms that are considered "unfair". They are usually the ones in the fine print.

"Unfair terms can include a term that allows a business to determine, unilaterally to change the terms of the contract, including the price of the contract or even the goods and services that are provided under that contract", Ms Collier said.

Ms Collier said mobile phone contracts were the most common ones with clauses that favour the company.

Some examples of what she calls "unfair" clauses are:

• Cancellation fees for the early termination of the contract, with is often higher than the price of the remaining contract.

• The supplier's allowed to vary the rates or charges at any time.

• Terms and conditions are often not detailed in the signed contract, but are available "on request".

Not surprisingly, financial institutions are the big winners too.

One major lender's contract states: "From time to time we may: change the amount of or basis for calculating any fee or charge; change the interest or fee charging cycle; impose and debit any new fee or charge; and change any other terms and conditions".

"There is often an enormous amount in fine print and the contract you sign is in fact only a summary of the terms of the contract that you are actually bound by," Miss Collier said.

Victoria is currently the only state that has Unfair Terms Legislation. Everywhere else, the terms of any contract can favour the company as much as they like.

The Consumer Law Centre wants to see unfair contracts outlawed in other states.

"Consumers shouldn't have to deal with large amounts of fine print or legalese", Ms. Collier said.

Selvana claims businesses make contracts as confusing as possible so they will always be able to find a loophole that favours them.

Tamika took her case to the Telecommunications Ombudsman and has since received a new phone. But she says next time she will shop around for the company with the fairest contract, rather than the cheapest.

The Consumer Law Centre is at

Find the Telecommunications Industry Ombudsman at