Optus faces court after allegedly misleading 20,000 customers over NBN migration

Optus faces court after allegedly misleading 20,000 customers over NBN migration

Follows Optus' move to offer remedies to over 8,700 customers over NBN speeds

The Australian consumer watchdog has taken Optus Internet to court alleging that the telco misled up to 20,000 customers about the need to move quickly from its existing hybrid fibre-coaxial (HFC) network to the National Broadband Network (NBN).

In its legal action, lodged with the Federal Court, the Australian Competition and Consumer Commission (ACCC) alleges that between October 2015 and March 2017, Optus made “false and misleading representations” by advising its customers it would disconnect their HFC service within a specified time-frame, as the NBN was coming to their area.

According to the ACCC, however, the timeframes given by Optus were earlier than the telco was contractually allowed to cancel the customers’ services.

“We allege that Optus’ misrepresentations put pressure on customers to move to the NBN sooner than they were required to,” ACCC chairman, Rod Sims, said. “This is particularly concerning as Optus received a significant financial payment from NBN Co for each customer that moved from its cable network to the NBN.”

Optus and NBN Co entered into an agreement in 2011 which saw NBN Co agree to make payments to Optus in respect of each customer who migrated from Optus’ existing HFC network to the NBN, whether the customer acquired NBN-based services from Optus or from another retail service provider. 

The agreement was subsequently amended in 2014.

The ACCC is now also alleging that, between October 2015 and September 2016, Optus misled some of its customers about their options for purchasing an NBN plan.

According to Sims, Optus created the “impression” that its customers were required to obtain NBN services from Optus, when they could have chosen to switch to any internet service provider.

“We are also concerned that Optus cut off some of its customers’ internet services when it had no contractual right to do so. Telephone and internet are essential utilities and it is unacceptable for Optus to treat its customers this way,” Sims said.

Broadly, the ACCC is seeking declarations, injunctions, pecuniary penalties, a publication order, compliance orders and costs.

For its part, Optus claims the issues arose as a result of processes which it no longer uses and that it has already taken action to compensate affected customers.

“In late 2016, we made the decision to migrate customers off our broadband cable network to the NBN as soon as an area was serviceable,” an Optus spokesperson told ARN. “During this process, we provided some customers with insufficient notice of their options to migrate. As a result, some customers were disconnected before they migrated to the NBN.

“We acknowledge that this process did not deliver on our intent to provide an excellent migration experience. When we became aware of customer concerns, we suspended all migration activations and reconnected affected customer as quickly as possible.

“We also compensated customers who had been disconnected without sufficient notice. The ACCC’s action today relates to past processes that we have successfully addressed. We are working cooperatively with the ACCC to resolve the issue,” the spokesperson said.

The legal action comes as Optus agrees to offer “remedies” to more than 8,700 of its customers who were misled about maximum speeds they could achieve on certain Optus NBN plans.

This followed a similar move by Telstra, which about 42,000 Telstra and Belong customers set to receive compensation after the telco admitted to misleading customers with its maximum speed claims.

Both of the compensation undertakings were prompted by ACCC action.

“As the NBN rollout continues throughout Australia, people will be making decisions about which provider to go with,” Sims said. “ISPs must not mislead consumers when competing for business. We are keeping a close eye on this sector and will take action where we see wrongdoing.”

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