Telcos and its executives could face court over misleading advertisements
- 17 September, 2018 11:29
The Australian consumer watchdog has warned telecommunications providers to keep their advertising clear and transparent or they could face court action.
The Australian Competition and Consumer Commission (ACCC) chair Rod Sims said that "much higher" penalties are in play and executives who knowingly approve misleading advertisements could also face charges from the regulator.
ACCC started investigating Optus, Telstra and Vodafone's use of the word "unlimited" in their advertisements.
This investigation was happening at the same time as Optus took Telstra to court in May as it felt that a Telstra advertisement was likely to mislead consumers.
At the time of the hearing, Justice Gleeson found that Telstra's advertisement on its homepage and billboards in metropolitan areas which claimed, "One word from Australia’s best mobile network. Unlimited", falsely conveyed the representation that Telstra offers a mobile product or service that is unlimited.
Telstra was later banned from re-running the "unlimited" advertisements for a period of three years.
Now, the ACCC said that between March and June 2018, Optus, Telstra and Vodafone advertised mobile data plans with a headline claim of "unlimited" mobile data, but the services had speed caps imposed on particular uses or after a certain data threshold was reached, among other limitations.
According to the ACCC, following the court decision over the Telstra's advertisement, all three telcos ceased using the "unlimited" word on its mobile data services ads.
“Telecommunications companies should be wary of using absolute claims like ‘unlimited’ where that does not give a true picture to consumers of what is being offered,” Sims said.
“We have taken a range of actions against telecommunication companies for misleading consumers. It is about time they showed more respect for their customers and the Australian Consumer Law.
“With much higher penalties now available for breaches of consumer law, I hope they will take their obligations more seriously," Sims added. "From now on consumer law penalties will seriously affect their bottom line, and we will not hesitate to seek the highest possible penalties."