What’s wrong with the Auckland Academy of Learning’s $11,000 “top of the line” educational software package – apart from its high price? The company’s sales agreement says people who sign up for the product are required to take the “entire risk” for its performance.
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The Auckland Academy of Learning sells software door-to-door called the “CAMI Graduate Program”. CAMI stands for “Computer Aided Mathematics Instruction”, although the software also includes modules on English. The company says prices for the software range from $2750 up to $11,000 over 4 years.
The programme’s aimed at primary and secondary school students and is sold through in-home demonstrations. The demonstrations include an assessment of your child’s learning level. But sales staff aren’t required to have any teaching qualification. We started looking into the Auckland Academy of Learning’s sales agreement after hearing about complaints from unhappy customers. The Commerce Commission confirmed it’s also received complaints, which are being reviewed.
Despite the programme’s high price, the Academy’s sales agreement says its products are delivered “as is” and the company makes no warranty “regarding the use or the results of use of the products or written materials in terms of correctness, accuracy, reliability, currency or otherwise”.
The agreement also says the company’s entire liability is limited to replacing defective computer discs, provided they’re returned within 90 days of delivery.
In our view, these terms and conditions risk misleading consumers about their rights to goods of acceptable quality. Customers buying on credit are also told the company retains the right to cancel the agreement “without notice” if the purchaser has breached any of the terms. If the company does cancel, the contract still holds the customer liable for payment.
But the sales agreement doesn’t include information about consumers’ legal rights under the Credit Contracts and Consumer Finance Act. When goods are sold on credit, the Act requires companies to disclose certain information – including information about the customer’s right to cancel. If disclosure isn’t made correctly, the agreement can’t be enforced.
The Academy’s lawyer Mike Worsnop told us the company has been “co-operating fully” with the Commerce Commission’s investigation. As a result of concerns raised, he says the Academy has reviewed its terms and conditions to ensure they are “fully compliant with all applicable legislation” but is waiting to hear from the commission before changes are implemented.
Mr Worsnop says the Academy stands behind its products and is “always willing to engage with its customers to find an appropriate solution” whenever concerns are raised.
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