The Australian Competition and Consumer Commission (ACCC) has warned telecommunications companies to ensure their advertising is clear and transparent, or face court action.
The ACCC has recently taken a wide range of actions against telecommunications companies. This includes misleading and deceptive conduct in relation to NBN broadband speed claims by Telstra, Optus and iiNet and Internode. It has also taken action in relation to the transition to the NBN, Telstra third party charges and Sprint for the unauthorised transfer of customers, among other conduct.
Earlier this year the ACCC began investigating Optus, Vodafone and Telstra’s use of the term “unlimited” to promote mobile data plans. The services were actually limited by speed caps imposed on particular uses, or after a certain data threshold was reached. In most cases the claims were qualified with disclaimers that were not sufficiently prominent or clear.
The ACCC's action is concurrent with private litigation brought by Optus against Telstra in the Federal Court. Following the Federal Court’s findings and the ACCC’s interactions, all three retailers ceased using the headline claim of “unlimited” to advertise their mobile data services.
“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,” ACCC Chair Rod Sims said.
Penalties for contraventions of the Australian Consumer Law increased on 1 September to the greater of $10 million, three times the value of the benefit received, or (where the benefit cannot be calculated) 10% of the annual turnover in the preceding 12 months. Penalties against individuals also increased from $220,000 to $500,000 per breach.
Mr Sims said it was time the telcos “showed more respect” for customers and Australian Consumer Law, and hoped that with the higher penalties they will take their obligations more seriously.