Login
Telcos to pay $33.5m for false and misleading NBN statements
Australia’s three largest internet service providers have been ordered to pay penalties totalling $33.5 million for making misleading statements about NBN maximum speeds.
Jess Feyder
Telstra Corporation (Telstra), Optus Internet (Optus), and TPG Internet (TPG) each admitted to making false or misleading representations to consumers when promoting certain NBN internet plans.
On Friday (11 November), Telstra was ordered to pay $15 million, Optus was ordered to pay $13.5 million, and TPG was ordered to pay $5 million in penalties for breaching the Australian Consumer Law (ACL).
The false or misleading statements appeared on their websites, in emails to consumers or in telesales, and related to their 50 Mbps or 100 Mbps fibre to the node (FTTN) plans.
Telstra, Optus and TPG each promised to tell consumers within a reasonable time frame if the speeds they were paying for could not be reached on their NBN connections. They each also said they would offer these consumers options, including to move to a cheaper plan, with a refund if they could not achieve the maximum speed on their plans.
The telcos admitted they did not have systems, processes, and policies in place to ensure they would do what they said they would and that they were in breach of the ACL.
The false or misleading statements made by the three providers affected nearly 120,000 consumers in total and were made for at least 12 months in 2019 and/or 2020.
“Fast and reliable internet is a necessity for Australian households, and consumers need accurate information when choosing the best internet plan to meet their needs,” stated ACCC commissioner Liza Carver.
“These significant penalties reflect the seriousness of the breaches of consumer laws by these large and sophisticated businesses that should be better informed about their obligations towards their customers, particularly given the promises they made to their customers and in undertakings previously provided to the ACCC regarding speed claims for their NBN plans in 2017,” she submitted.
Telstra, Optus and TPG also each admitted that by failing to notify consumers whose maximum attainable speeds were lower than the speed of their purchased plan, they had falsely represented to those consumers that their NBN connections were capable of higher speeds.
“Some customers may have paid for a 50 or 100 Mbps plan believing their NBN connection could support the higher download speeds, even though they would have been better off paying for a lower speed plan,” Ms Carver explained.
“It is illegal for businesses to make false or misleading representations to consumers about the performance characteristics, nature, standard or quality of products and services.”
Telstra, Optus, and TPG have each implemented remediation programs and have contacted impacted customers to provide refunds.
The court has ordered that Optus recontact affected customers who have not already responded to previous contact or been credited, to offer compensation within 120 days.
These Optus customers can expect to receive an update on their speed data, and there will be a dedicated customer service line for them to contact Optus regarding compensation.
TPG was ordered to implement an ACL compliance program, while Optus was ordered to update its existing compliance program.
Telstra already has ACL compliance program obligations under a court-enforceable undertaking given to the ACCC after the ACCC’s action in relation to unconscionable conduct towards indigenous customers in 2020.
TPG, Optus, and Telstra co-operated with the ACCC to make joint submissions on penalty and other orders to the court, and they were ordered to pay part of the ACCC’s costs.
The ACCC has previously taken legal action against Telstra and Optus in relation to other false and misleading statements.
