Bad hair day for Ashley & Martin

ASHLEY & Martin has had a bad hair day, with the Federal Court voiding thousands of consumers’ contracts over terms found to be unfair.

The hair-loss services provider made clients pay 100 per cent of the program’s total cost when they wished to terminate their contract more than two days after signing up, the consumer watchdog says.

The Australian Competition and Consumer Commission says Ashley & Martin signed up more than 25,000 customers to its so-called Personal RealGROWTH Program from June 2014 to June 2017.

Customers typically signed up through a sales consultant, and needed to pay the entire cost of the program upfront before receiving or properly considering medical advice.

All three contracts used to sign up clients to the hair treatment program were deemed invalid by Justice Katrina Frances Banks-Smith yesterday.

“Ashley & Martin’s terms meant consumers were penalised for stopping their hair loss treatment even if they developed an adverse side effect to the medication,” ACCC commissioner Sarah Court said.

“Consumers should be allowed a fair opportunity to fully consider the treatment program and medical advice when they sign up, and not be penalised for exiting a treatment plan if necessary.”

The ACCC said the unfair terms in Ashley & Martin’s contracts “could have caused consumers to lose hundreds or thousands of dollars if they left the program after considering medical advice or developing side effects to the treatment”.

In a statement, Ashley & Martin said it was disappointed at the ruling and planned to seek legal advice on a possible appeal.

The company said it had addressed the issue, implementing a seven-day coolingoff period and more “transparent” termination fees in July 2017.

Patients wanting to exit their void contracts were offered redress, according to Ashley & Martin, while new clients now had the option of paying in monthly instalments.

The ACCC said it would still pursue a consumer redress order and costs, at a later date to be set by the court.

In its statement yesterday, the ACCC said that under Australia’s consumers laws, it was not illegal for businesses to include terms in their contract that were unfair to consumers, or to rely on those terms.

As a result, courts could not impose penalties on such companies. But they could declare the terms to be void and therefore unenforceable, the commission said.