Optus has quickly followed the lead of Telstra in its move to offer “remedies” to more than 8,700 of its customers who were misled about maximum speeds they could achieve on certain Optus National Broadband Network (NBN) plans.
According to the Australian consumer watchdog, Optus offered NBN services to consumers advertising a range of speed plans between 1 September 2015 and 30 June 2017.
These included a so-called “Boost Max”, which advertised maximum download speeds of up to 100 megabits per second (Mbps) and maximum upload speeds of up to 40 Mbps (100/40 Mbps).
According to the Australian Competition and Consumer Commission (ACCC), however, technical limitations on the customers’ fibre-to-the-node (FttN) or fibre-to-the-building (FttB) NBN connections meant the customers could not get the speeds that were advertised.
The proposed compensation is part of a court-enforceable undertaking to the Australian consumer watchdog detailing the remedies it will provide to affected customers, including refunds, moving speed plans, discounted speed plans, and exit from contracts without paying a fee.
The court-enforceable undertaking also requires Optus to check within four weeks of connecting a customer to a new NBN speed plan that they are getting the advertised speeds they are paying for.
Optus said it would be contacting affected consumers on or before 2 March 2018 by email or letter.
“Optus is the second major internet provider we have taken action against for selling broadband speeds they could not deliver to their customers,” ACCC chairman, Rod Sims, said.
“Worryingly, many affected Optus FttN customers could not even receive the maximum speed of a lower-tier plan. This is a concerning trend we have seen throughout the industry and we are working to fix this,” he said.
According to the ACCC, 5,430 – or 48 per cent – Optus FttN consumers on a 100/40 Mbps plan could not receive 100/40 Mbps, and 2,337 – 21 per cent – of those consumers could not receive 50/20 Mbps.
Meanwhile, 1,519 Optus FttN consumers on a 50/20 Mbps plan could not receive 50/20 Mbps and 1,381 Optus FttN consumers on a 25/5 Mbps plan could not receive 25/5 Mbps.
The ACCC said that Optus had admitted that by promoting and offering speed plans that could not be delivered, it likely contravened the Australian Consumer Law (ACL) by “engaging in misleading or deceptive conduct and making false or misleading representations”.
“Optus acknowledges that it did not have the appropriate procedures in place to confirm the speed of the NBN service at the time of purchase by affected customers,” a spokesperson for the telco said in a statement.
“We apologise to customers who have been affected by this error and are putting a process in place to rectify this issue.
“We have been working cooperatively with the ACCC to remediate affected customers for differences between their chosen speed plan and the speed obtained,” it said.
The court-enforceable undertaking comes just over a month after the ACCC revealed that about 42,000 Telstra and Belong NBN customers would be receiving compensation after the telco admitted to misleading customers with its maximum speed claims.
ACCC commenced an investigation when Telstra notified the consumer watchdog that approximately 9,000 of its customers on 100/40 Mbps and 50/20 Mbps plans could not receive speeds above the next lower speed plan.
The ACCC revealed plans in July to take legal action by the end of the year against telcos that are found to have misled consumers over broadband speed claims.
The move to take such cases to court came as the ACCC decided to put Australia’s internet service providers (ISPs) in the crosshairs with its program to monitor the country’s broadband speeds and crack down on dodgy speed claims by network resellers.
“We’ll have a few cases in court by the end of the year,” ACCC chairman, Rod Sims, told the ABC’s Peter Ryan on 20 July. “But we want to make sure that we solve this problem; we want to bring about broader change within the industry, and give better information to consumers.”
Sims revealed At the time that the ACCC was focused squarely on the four largest players in the local market: Telstra, Optus, Vocus and TPG.
“We’re really focusing on the big ones. If we find a small one doing something dreadful, of course we’ll take action as well, but the four biggest players are 90 per cent of this market,” he said. “The main focus will be on Telstra, Optus, Vocus and TPG.