Warning about subscription services for small businesses

The NSW Small Business Commissioner is warning small businesses to be wary of some popular subscription services which are leaving businesses with thousands of dollars of unexpected bills. 

The Commission has been approached by small businesses who say they were caught out by unclear terms and conditions in contracts they entered into. The Commissioner has written to a number of subscription services requesting responses to complaints made by small businesses.

Small businesses have reported experiences including: 

• Unclear contract terms and conditions 
• Lack of transparency about automatic contract renewal, leaving businesses unable to amend or terminate a contract in circumstances where they claim to have been misled about their contractual rights and obligations 
• Experiences that did not meet expected service standards or outcomes promised  
• Difficulty contacting representatives for support and assistance as required.  

Commissioner Chris Lamont said that while small businesses had a responsibility to understand the terms and conditions of any contract they entered into, service providers should also provide documentation and processes which improved clarity and reduced unnecessary ambiguity in contracts. 

He also reminded businesses that new, tougher laws would take effect on 9 November 2023 which would penalise businesses that included unfair contract terms in standard form contracts with consumers and small businesses. 

Courts will be able to impose substantial penalties on businesses and individuals who include unfair terms in their standard form contracts.