Telstra, Optus and TPG have been slogged with a collective $33.5 million in penalties for making false or misleading claims about National Broadband Network (NBN) plan speeds.
Telstra was ordered to pay $15 million; Optus was hit with a penalty of $13.5 million and TPG had to shell out $5 million for breaching Australian Consumer Law (ACL) by making false or misleading statements in relation to 50Mbps or 100Mbps fibre-to-the-node (FTTN) plans.
Brought on by the Australian Competition and Consumer Commission (ACCC) in August 2021, the consumer watchdog said today the false or misleading claims affected nearly 120,000 consumers and were made for at least 12 months in 2019 and/or 2020.
“These significant penalties reflect the seriousness of the breaches of consumer laws by these large and sophisticated businesses that should be better informed about their obligations towards their customers, particularly given the promises they made to their customers and in undertakings previously provided to the ACCC regarding speed claims for their NBN plans in 2017,” ACCC commissioner Liza Carver said.
The three telcos admitted that they had made the statements, as well as failing to notify consumers whose maximum attainable speeds were lower than the speed of their purchased plan and therefore had falsely represented to those consumers that their NBN connections were capable of attaining the higher speeds.
“Some customers may have paid for a 50 or 100Mbps plan believing their NBN connection could support the higher download speeds, even though they would have been better off paying for a lower speed plan,” Carver said.
“It is illegal for businesses to make false or misleading representations to consumers about the performance characteristics, nature, standard or quality of products and services.”
The three telcos have implemented their own remediation programs and have already contacted affected customers to provide refunds. Additionally, the Court ordered that Optus in particular recontact those that have not responded or have been credited to offer compensation within 120 days.
Optus was also ordered to update its ACL compliance program, while TPG was told it had to implement one.
Telstra has an ACL program in place after the ACCC took action against it in a separate case on unconscionable sales to Indigenous customers in November 2020. Six months later in May 2021, it was fined $50 million.
Additionally, the three telcos were ordered to pay part of the ACCC’s costs.