Episode 13 - The Diagnosis? A Case of Unfair Contract Terms! (ACCC v AMI)

The Australian Consumer Law can be useful for a range of circumstances, even extremely personal ones. In Episode 13 of Keeping Up with the Consumer Law, Grieger walks us through the sensitive case of ACCC v AMI.

Following one of the most prominent and memorable advertising campaigns of the 2000s, characterised by the line “Want Longer Lasting Sex?”, the ACCC commenced proceedings against Advanced Medical Institute (AMI) and related entities alleging a raft of contraventions of the Australian Consumer Law including unconscionable conduct. In this episode, we explore how this case dived into the easily forgotten area of unfair contract terms.

The Federal Court’s Justice North declared a range of provisions contained in AMI’s (or related entities’) customer agreements void as they violated the Australian Consumer Law’s prohibitions on unfair contract terms. This included terms imposing arbitrary administrative and cancellation-related fees as well provisions that effectively punished patients for terminating their arrangements with AMI (or related entities) even where the medication did not work. Broadly, the contracts were found to lack transparency and clarity, ultimately leading to a situation where the contracts’ terms were unfair.

This is the thirteenth episode of Keeping Up with the Consumer Law. Keeping Up with the Consumer Law is financially supported by the Law Foundation of South Australia.

Want to learn more about this case? There is a long litigation history to this case, check out some of the details here:

• Australian Competition and Consumer Commission v ACN 117 372 915 Pty Limited (in liq) (formerly Advanced Medical Institute Pty Limited) and others [2015] FCA 368

• ACCC institutes further proceedings against AMI (8 June 2011) www.accc.gov.au/media-release/accc-institutes-further-proceedings-against-ami

• ACCC joins NRM to Advance Medical Institute proceedings and alleges unfair contract terms (7 September 2011) www.accc.gov.au/media-release/accc-joins-nrm-to-advanced-medical-institute-proceedings-and-alleges-unfair-contract-terms

• Federal Court finds Advanced Medical Institute engaged in unconscionable conduct (22 April 2015) www.accc.gov.au/media-release/federal-court-finds-advanced-medical-institute-engaged-in-unconscionable-conduct

• Full Court upholds unconscionable conduct finding against AMI (22 July 2016) www.accc.gov.au/media-release/full-court-upholds-unconscionable-conduct-finding-against-ami

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Keeping Up with the Consumer Law is intended to be for educational purposes only and should not be considered legal advice. Does this episode raise any questions for you about how you can use the ACL or what your obligations are under the ACL? We recommend seeing a lawyer, head over to ⁠www.consumerlaw.media/legal-advice⁠ for more information.