The ACCC, the market regulator in Australia, revealed that it has started proceedings in the Federal Court against Telstra, Optus and TPG for making alleged false representations in their promotions of some 50Mbps and 100Mbps NBN plans.
ACCC said Telstra, Optus and TPG accepted payments for NBN broadband speeds they could not provide in Australia.
Telstra, Optus and TPG made representations to consumers on Fibre to the Node (FTTN) connections that they would test the maximum speed of their connections, notify the impacted consumer of their maximum speed if their line was underperforming, and offer them remedies if the maximum speed was below their plan’s stated speed, but failed to do so for many customers, ACCC said.
Telstra, Optus and TPG wrongly accepted payments from certain customers for NBN plans when they were not provided with the promised speeds.
“Telstra, Optus and TPG promised to tell consumers within a specific or reasonable timeframe if the speed they were paying for could not be reached on their connection. They also promised to offer them a cheaper plan with a refund if that was the case. They failed to do these things, and many consumers paid more for their NBN plans than they needed to,” ACCC Chair Rod Sims said.
Telstra, Optus and TPG were well aware of these issues and had earlier given undertakings to the ACCC to provide remedies to consumers who purchased NBN plans with speeds that couldn’t be delivered, Sims said.
The allegedly false and misleading statements were made on the companies’ websites and in emails to consumers from at least 1 April 2019 to 30 April 2020 by Telstra and TPG, and at least 1 January 2019 and 31 December 2019 by Optus.
Telstra had stated it would test the line speed 21 days after connection and promised consumers “If your nbn connection doesn’t allow you to properly benefit from the speed tier you’re on, we’ll provide you with a maximum line speed, once it’s available, along with alternative options.”
Optus told consumers it would check the Internet speeds and that options will be provided if the actual speed you achieve is lower than what’s included in your plan or speed pack.
TPG said it would email consumers their line speeds around three weeks after activation and that consumers would have the option to move to a lower speed plan or to change providers without contract break fees.
The ACCC in a statement alleges that Telstra, Optus and TPG didn’t have adequate systems in place to implement the speed checks, notifications and remedies they said they would carry out.
This investigation was prompted both by Telstra self-reporting elements of this conduct to the ACCC and by information in the ACCC’s Measuring Broadband Australia Reports indicating broadband consumers were not receiving the Internet speeds they were paying for.
Telstra, Optus and TPG have promised to compensate consumers even before the court case is finalized.
Telstra, Optus or TPG are contacting customers who are affected to advise them if they are eligible for a refund, and offer alterative plans, or an opportunity to leave their contract without penalty. Consumers may also contact their provider directly for further information.
ACCC has previously taken legal action against Telstra, and Optus (in 2018, early 2019, and late 2019) in relation to other false and misleading statements.