Court dismisses watchdog’s appeal over TPG ‘prepayment’ case

Court dismisses watchdog’s appeal over TPG ‘prepayment’ case

The appeal was launched after the Federal Court threw out a legal challenge by the ACCC against TPG

Credit: ACCC

The Australian competition watchdog has lost its appeal against TPG Internet Pty Ltd (TPG) in relation to the marketing and sale of some prepaid internet, home telephone and mobile plans.

The Full Federal Court has dismissed the appeal by the Australian Competition and Consumer Commission (ACCC), which was launched after the Federal Court threw out a legal challenge by the ACCC against TPG Telecom over alleged misleading conduct relating to a $20 ‘prepayment’ fee paid to the telco by some of its customers.

The prepaid plans at the core of the case required customers to make a ‘prepayment’ of at least $20 for the potential usage of services not included in the value of their plan, according to the ACCC. 

When the prepayment balance drops below $10, the ACCC said, TPG automatically topped up the prepayment balance to $20. When the plan was cancelled, the prepayment balance was forfeited.

In its challenge, the ACCC claimed that by representing this as a ‘prepayment’, consumers were misled by TPG into thinking they could use all the money they had prepaid for out-of-plan services, when this was not usually possible. 

However, the Full Federal Court has held that TPG’s use of the word ‘prepayment’ did not convey anything about the way in which TPG would hold and apply the prepayment, particularly at the end of the plan.

“We took this case and appealed the previous decision because we considered that TPG was misleading consumers by not adequately disclosing the details about the mandatory prepayment,” ACCC Deputy Chair Delia Rickard said.

“Consumer awareness of important terms should not be expected where they are contained in the fine print of a long and detailed contract or, in the case of online contracts, after multiple click-throughs.”

“We remain concerned that TPG’s customers were not able to use up their full prepayment, or get a refund for any unused funds,” Ms Rickard said.

The ACCC said it is now “carefully” considering the judgment.

This is the second challenge in recent months against TPG that the ACCC has lost, with the Federal Court in February voting in favour of the $15 billion merger between TPG Telecom and Vodafone Hutchison Australia (VHA), overruling opposition from the ACCC.

In March, the ACCC said it had decided against appealing the decision by the Federal Court to allow telcos TPG Telecom and Vodafone Hutchison Australia (VHA) to go ahead with their merger, which ultimately came to fruition at the end of June.

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