Australia’s three largest internet service providers, Telstra, Optus and TPG have copped Federal Court penalties totalling $33.5 million after they all admitted to making false or misleading claims about their NBN plans.
Telstra was ordered to pay $15 million, Optus $13.5 million, and TPG $5 million for breaching the Australian Consumer Law (ACL) in relation to their 50Mbps or 100Mbps fibre to the node (FTTN) plans.
Consumer watchdog the ACCC launched legal action against the trio after they’d made promises to customers warning them if the speeds they paid for could not be reached and offer options, such as a cheaper plan with a refund. But the companies did not have adequate systems, processes and policies in place to ensure the’d do what they said they would.
The false or misleading statements by the telcos affected around 120,000 customers and were made for at least 12 months in 2019 and/or 2020.
ACCC Commissioner Liza Carver said the significant penalties reflect the seriousness of the breaches of consumer laws by “large and sophisticated businesses that should be better informed about their obligations towards their customers, particularly given the promises they made”.
The ACCC had tackled them over the issue in 2017 and Telstra, Optus and TPG gave undertakings to fix the problem then.
“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,” Carver said.
Telstra, Optus, and TPG have each implemented remediation programs and have already contacted impacted customers to provide refunds.
The Court ordered that Optus re-contact 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.
The three telcos were also ordered to pay part of the ACCC’s costs.
Trending
Daily startup news and insights, delivered to your inbox.