TPG Internet has become the third telco in Australia to agree to compensate customers that were misled about maximum speeds they could achieve on certain TPG NBN (National Broadband Network) plans, with up to 8,000 customers affected.
According to the Australian Competition and Consumer Commission (ACCC), between 1 September 2015 and 30 June 2017, TPG sold NBN broadband plans advertising a range of speeds.
TPG admitted to promoting and offering speed plans with maximum speeds that could not be delivered, which likely results in contravening the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct and making false or misleading representations.
Affected customers include those who purchased TPG’s fibre-to-the-node (FttN) and fibre-to-the-building (FttB) NBN plans.
According to ACCC, 7,509 of 100/40 Mbps FTTN customers could not receive the speeds they purchased. Of those customers, 2,088 could not even receive 50/20 Mbps.
There were also 42 of 100/40 Mbps FTTB customers that could not receive the speeds purchased and 411 of 25/5 Mbps FTTN customers could not receive the speeds they purchased.
Affected customers will be able to choose from options including moving to a lower tier speed plan with a refund or exiting their plan without cost and receiving a refund.
TPG will contact affected consumers by 2 March 2018 by email or letter. Affected customers entitled to a refund will receive between $10 and $30 for each month that they paid for their plan.
“We apologise to the NBN customers that have been confused about broadband speeds, the total number of which represents less than 3.5 per cent of our total nbn subscriber base,” TPG Coo, Craig Levy, said.
“Due to the multiple NBN technologies available, TPG and other retailers have found themselves in a very difficult position because FTTN and FTTB technologies speeds are dependent on a number of factors including distance, co-existence and copper quality.
“Furthermore, the RSP only finds out about the actual speed a consumer will obtain after the customer service has been activated. For that reason, TPG never made the particular speed tier (for example, 100mbps) the main focus of its TV, radio or internet advertising.
“TPG did, however, in direct mail and in the product section of its website where consumers could digest the additional information provided by TPG about speeds, differentiate between the products by reference to the speed tiers sold to TPG by the NBN," added Levy.
TPG has committed to tell affected consumers the maximum speed their connection can achieve and explain their compensation options.
“The technical limitations of NBN’s fibre-to-the-node technology meant many TPG customers could not reach the advertised 100/40 speeds they paid for. Some couldn’t even get half those advertised speeds,” ACCC chairman, Rod Sims, said.
“TPG charged customers higher prices for the promise of faster speeds, misleading many customers into paying a premium price for a service they could not get.
“This is the third major internet provider we have taken action against in the past few weeks. Internet service providers must take responsibility to ensure that their customers get the promised speeds that they pay for.”
In early November, ACCC revealed that 42,000 Telstra and Belong NBN customers were to be compensated after the Telstra admitted misleading customers with its maximum speed claims.
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. With the ACCC’s investigation subsequently revealed a larger pool of customers were impacted
A month later it was Optus turn, with the telco announcing 8,700 were going to be compensated as Optus failed to deliver its maximum NBN speeds.