Vocus-owned Dodo Services is set to refund up to $360,000 to around 16,000 customers due to claims that its entry-level NBN broadband plans were ‘perfect for streaming’.
The refunds are part of a court-enforceable undertaking made to the Australian Competition and Consumer Commission (ACCC) after Dodo admitted its conduct was likely to be false or misleading, and in contravention of the Australian Consumer Law (ACL).
From November 2015 to March 2018, Dodo advertised its NBN broadband plans as ‘perfect for streaming’, including plans with maximum speeds of 12Mbps. Some of these plans only had 10GB of included data.
“We were concerned that Dodo customers on these plans could not reliably stream high quality video, particularly when others in the household were using the internet at the same time. At 12Mbps, Dodo’s customers could not stream ultra HD video at all,” ACCC Chair Rod Sims said.
The ACCC also took into account that Dodo customers would use up their data allowance after a modest amount of streaming when their included monthly data is limited to 10GB.
“According to Netflix, high definition streaming uses up to 3GB of data per hour. With these plans a customer would have to pay extra if they streamed just two or three movies.”
“We don’t believe NBN plans with just 10GB of included data are ‘perfect for streaming,'' Sims said.
“The ACCC will continue to address consumer issues in the provision of broadband services, including misleading use and performance claims made by providers.”
Vocus chief executive for business and consumer, Antony de Jong, said doing the right thing by our customers is its focus and apologised for the error.
"Our team will contact impacted current and former customers as soon as possible. Further, we ceased new sales of that specific NBN plan and promotion some time ago, turning our focus to offers that deliver a better experience," he said.
The court ruling comes as Vocus split its business into three separate units comprising of Vocus Network Services, Vocus Retail and Vocus New Zealand.
During a detailed briefing, Vocus Group managing director, Kevin Russell was upfront about its struggling retail business, which since June 2017, has suffered massive customer losses with an erosion of about 187,000 voice customers in the Commander brand; 84,000 in broadband and the loss of 182,000 customers since the migration of the NBN has taken place.
Despite the Vocus Retail business facing headwinds with lower margin NBN products, it was still optimistic on turning the unit around and was working closely with NBN Co in bringing new product opportunities to the market such as NBN Enterprise Ethernet, which is an area that it thinks it can play aggressively in.