hipages Group Pty Ltd

The Australian Competition and Consumer Commission (ACCC) has accepted a court-enforceable undertaking from hipages Group Pty Ltd (hipages) on 28 May 2023 under section 87B of the Competition and Consumer Act 2010 (Cth) in relation to claims about conduct that was likely to contravene sections 18 and 29(1)(m) of the Australian Consumer Law (ACL).

hipages is an Australian online sales lead generation platform where tradespeople (Subscribers) pay a monthly subscription fee to hipages to quote on jobs posted by consumers.

The ACCC commenced an investigation into hipages after receiving complaints relating to provisions contained in its contracts and related interactions with Subscribers. Specifically:

• a provision enabling hipages to automatically renew a Subscriber’s contract for 12 months at the end of each term (Automatic Renewal Provision); and
• an early termination fee provision which makes the Subscriber liable to immediately pay the balance of their subscription fee should they cancel the contract (ETF Provision) outside of a cooling-off period. The ETF Provision also applies where a contract has been automatically renewed.

hipages’ contracts with its Subscribers are offered for initial terms of 6 or 12 months and can cost between $25 and $999 per month. Subscribers enter into their contract during a sign-up phone call with a hipages representative (Sign-up Call). During the Sign-up Call, which is recorded, the Subscriber must verbally agree to be bound by the terms in the Subscription Contract. Shortly after the Sign-up Call, hipages sends a summary email (Summary Email) which includes a link to the Subscription Contract (containing its full terms).

Two weeks before a Subscriber’s automatic renewal date, hipages sends an email to notify the Subscriber that the automatic renewal will occur (Renewal Email). Prior to 8 March 2023, no other form of notification was given.

The ACCC considers that:

• between at least October 2018 and 13 January 2022, hipages engaged in misleading or deceptive conduct by not disclosing, or not adequately disclosing, the existence and/or effect of the Automatic Renewal Provision and the ETF Provision to Subscribers in its Sign-Up Call, Summary Email and/or Renewal Email; and
• between at least 18 April 2020 and 16 April 2021, hipages engaged in misleading or deceptive conduct by making false or misleading representations to particular Subscribers, via emails and phone calls, that they needed to take additional steps to cancel their contract and/or that hipages had the right to enforce payment for a further contract term.

hipages has made admissions in its undertaking that its conduct, as described above, was likely to have contravened sections 18 and 29(1)(m) of the ACL.

The Undertaking from hipages is 3 years in duration and includes commitments from hipages to:

• ensure its Sign-up Call scripts, Summary Emails and Renewal Emails clearly and prominently disclose the ETF Provision, Automatic Renewal Provision, and how they operate together, and inform Subscribers:
  • that the ETF Provision applies when a Subscriber cancels the Subscription Contract for any reason at any time outside the cooling-off period, including when the contract is automatically renewed;
  • that, when applicable, the ETF Provision makes the Subscriber liable to immediately pay out the entire remaining balance of their Subscription Contract;
  • that if a Subscriber accepts a lead during the cooling-off period, they waive their right to cancel the contract during the cooling-off period. If they wish to cancel their Subscription Contract in such circumstances, they will become liable to immediately pay out the remaining balance of their Subscription Contract; and
  • of the methods by which a Subscriber can elect not to automatically renew or otherwise cancel their Subscription Contract;
• review its complaint handling system and any relevant outstanding Subscriber complaints from January 2019 to the commencement date of its undertaking to offer remediation where appropriate; and
• implement a compliance program.

hipages has co-operated with and responded to the ACCC’s enquiries regarding the conduct of concern. As a result of the ACCC’s investigation, from 13 January 2022, hipages has updated the scripts it uses during the Sign-up Call, and its Summary Email and Renewal Email templates to improve the disclosure of the cooling-off period, ETF Provision and Automatic Renewal Provision.

Additionally, from 8 March 2023, hipages:

• implemented updated staff training and processes, including to ensure that Subscribers’ requests that their Subscription Contract not be automatically renewed are actioned as soon as possible, or otherwise within 5 business days; and
• commenced providing additional reminders to Subscribers of any upcoming automatic renewal date as follows:
  • day 14 before a Subscriber’s renewal date: first reminder Renewal Email;
  • day 12 before a Subscriber’s renewal date: first SMS reminder;
  • day 7 before a Subscriber’s renewal date: second reminder Renewal Email; and
  • day 5 before a Subscriber’s renewal date: second SMS reminder.

hipages’ conduct falls under ACCC enforcement priorities relating to protections for small businesses and consumer issues related to digital platforms.

hipages’ conduct potentially affected many small-business Subscribers, with many unaware that if they did not opt out of the Automatic Renewal Provision, or did not cancel their contract before the expiry of a cooling-off period, they would be liable to immediately pay out the remaining balance of their contract.

The Undertaking will result in improved disclosure of hipages’ ETF Provision and Automatic Renewal Provision, possible remediation for Subscribers with outstanding complaints, and will remind other businesses about their obligations under the ACL.