ACCC fines Telstra

Telstra has been fined $102,000 for a misleading iPhone 6 advertisement.

Australia’s largest telecommunications provider, Telstra, has paid a $102,000 fine, after the ACCC issued it with an infringement notice, for a misleading iPhone 6 advertisement.  

The advertisement, which appeared in The Age newspaper on 27 September 2014, featured a large photo of an iPhone 6 and displayed the plan cost as $70. Hidden in the fine print was an $11 additional handset cost which took the actual minimum plan price to $81.

ACCC chairman Rod Sims said, “Consumers should be able to understand the true cost of an advertised product so they can make informed purchasing decisions,” and that “Businesses must be careful about using attention-grabbing headline prices to ensure that their advertisements do not mislead consumers about the actual price they will have to pay. This is especially the case for bundled goods and services like phones and plans,”

A Telstra representative said that the company was surprised to receive the infringement notice and that the advertisement was in line with the way many others in the industry advertise mobile phone handsets. Telstra has now made some changes to its advertising to ensure the information is clearer for the customer.

Read more from the SMH.


Opinion: A slap on the wrist

The fine handed to Telstra for misleading advertising is nothing more than a slap on the wrist for the telecommunications giant. The company recorded a profit of $4.3 billion last financial year, which equates to a little over $122,000 every fifteen minutes, so a fine of $102,000 is nothing more than a warning for the whole industry to improve its advertising standards.

However, he infringement notice issued by the ACCC is a step in the right direction for the customer. Over the past decade a large number of Australian companies have been hiding details in the fine print, and this has to change. There is still more that can be done to help the customer, such as increasing the minimum accepted font size, both onscreen and in magazines, and the onscreen duration of all fine-print in television advertising.

While the fine handed down to Telstra won’t hurt them financially, let’s hope that it is a wake-up call to the whole industry Australia-wide to improve the way it advertises.

What do you think? Should Telstra have been slogged a much higher fine? Are you constantly misled by advertising due to hidden costs in the fine print? Do you struggle to read the fine print? 





    COMMENTS

    To make a comment, please register or login
    jfs43
    18th Dec 2014
    10:41am
    I quite often usen the 'pause" button on my TV so I can read the fine print at the bottom of an ad. It's amazing how the content of the ad is affected by what is in the fine print !!
    Wstaton
    18th Dec 2014
    2:00pm
    Are we saying here that if you can't pause your TV then you can't read the small print. If this is so could Telstra just say "Well it's in the fine print of the Ad" "Not our fault you didn't bother to read it"

    Pheww!!!
    Radish
    22nd Dec 2014
    5:29pm
    Talking of "fine print". I could have sworn that quite some years ago that the "fine print" was to be made larger. Even using a magnifying glass I still find it extremely difficult. I don't think we are meant to read it.
    particolor
    22nd Dec 2014
    6:52pm
    I've noticed the Cough Up figure is printed VERY LARGE !!
    Jurassicgeek
    18th Dec 2014
    11:33am
    they all do it.. so my Mute button comes in handy...
    AussieTuca
    18th Dec 2014
    12:55pm
    The big question is: Do they pay the proper tax? Or do they explore loopholes so they will not pay the due tax at all or very little?
    I am tired of hearing that such and such institution posted this and that profit. I am more interested in knowing how much tax they paid to the system. Or this is a subject that do not concern the John Does like me?

    For almost 40 years I paid my taxes to the government. Never cheated. What about companies like Telstra?
    Ozetwo
    18th Dec 2014
    1:20pm
    Wouldn't it be great to see the a list of the top 1000 personal and corporate tax payers issued each year.With luck it could become a badge of honour.
    particolor
    18th Dec 2014
    9:19pm
    Are You asking the ABC for the Return of Rubbery Figures ??
    Adrianus
    20th Dec 2014
    8:02am
    Aussie Tuca, if you have a calculator and can use it then as of July 2015 all you do is calculate 28.5% of the profit for business with a taxable income (profit) of less than $5m. For larger businesses with profit of over $5m their reduction in tax will be offset by a 1.5% levy used to fund the Paid Paternity Leave scheme. Therefor you may continue to use the current percentile (30%).
    When Telstra announces a franked (no relation) dividend that means that tax has been paid on that dividend. The franking credits are then taken up by investors to insure there is no double dipping by the ATO.
    And yes Telstra can afford the fine because the Labor government gave them $11billion, which amounts to about 3 years profit.
    wally
    21st Dec 2014
    5:14pm
    The tax office spent a lot of money chasing Paul Hogan for back taxes. Compared to the bigger corporate "Listed Companies" that avoid paying tax, Hogan is "small potatoes" and yet he was able to get off scot free. Large corporations would be able to muster a larger number of taxation lawyers than Hogan could who would defend their clients and produce the same result for their clients.
    So who framed the tax laws that have such large loop holes to make it easier for big companies to avoid paying taxes? Who voted to allow these flawed laws, loop holes and all, to stand as the law of the land? At the time these tax laws were enacted, were any of the politicians involved aware of the loop holes? Did any of the ones that knew really care? Would corporate donations to political parties have anything to do with it?
    A recent example of parliamentary Negligence is the enacting of the Gillard Government's Mining Tax Law. How much money were we told it was going to raise? How much money did it actually raise? And who was the Treasurer that went ahead and allocated the hoped for tax revenue and spent it, knowing full well of the shortfall when the money raised came nowhere near the amount Wayne Swan promised the Mining Tax would produce?
    So if you want a better rate of success in getting the big companies to pay the fair and correct amount of tax. you need parliamentarians to be more diligent and smarter in enacting the tax rates for big companies and ease up on the workers whose tax dollars make up for the lost unpaid tax revenue due from the big corporations.
    So Telstra had to pay a fine? They will recoup the money they had to pay by increasing their charges somewhere along the line. As Joh Bjelke Petersen was fond of saying, "Don't you worry about that." You can bet Telstra won't, either.
    Radish
    22nd Dec 2014
    5:32pm
    Wally, you will find that Paul Hogan did not get off scot free. He came to a confidential agreement with the tax office re his taxes.
    If you read this it appears his financial advisor absconded with quite a lot of Hogan's money hidden in off shore tax accounts.
    I wonder how many other actors are doing the same thing.?

    http://www.smh.com.au/entertainment/movies/hogan-chases-his-financial-adviser-and-stolen-millions-20130414-2htu0.html
    wally
    30th Dec 2014
    11:21am
    Radish. Thanks for the clarification about the ATO v. Hogan case. I guess we'd all like to know what sort of deal was made. And for that matter, what sort of wheeling and dealing goes on behind the scenes involving the ATO and the tax lawyer "hired guns" used by the big corporations? Money does "talk".
    Patriot
    18th Dec 2014
    1:08pm
    I don't and/or want an iPhone and don't watch TV exactly because of the programming and misleading of the public which has become "common Place & Legal".
    The fine issued is a mere token to - in my opinion once again - mislead the public into believing that the ICCC is efective in patroling and controling issues such as these!
    It is the yonger generation that "Cops the full Brunt" of issues like these & similar as they are totally programmed by the biased media and the lies & 1/2 truth the tell & portray.

    The fine "meted Out" is - in my opinion totally useless as the shareholders do not feel any PAIN. It is farcical.

    The following 2 links "tell the Story"!

    https://www.youtube.com/watch?v=qiKMmrG1ZKU
    https://www.youtube.com/watch?v=CWoorJKA6pg
    Adrianus
    20th Dec 2014
    8:04am
    Patriot, there are other TV channels other than the ABC.
    mac_paddy
    18th Dec 2014
    1:25pm
    Find out how many sales there were prior to the add being pulled. Then multiply that number by $11. That equals the number of customers who may have been misled. Then double or triple the value. Make these marketing decision cost the company money then they may not be so smart next time.
    Adrianus
    20th Dec 2014
    8:09am
    I think I agree with that. So if they sold around 5,500 iPhone 6's then it's a fair penalty. We, the people who use their service, need to be mindful that we don't lobby for them to push up their prices. We can only afford so much.
    Reeper
    18th Dec 2014
    1:52pm
    No matter what big corporations are fined, the cost is passed on anyway. What is wrong is the 'fine print' clauses which contain all sorts of time bombs. The laws need changing to ensure ALL costs are clear and up front.
    particolor
    18th Dec 2014
    9:22pm
    Yep !! Like that will happen Real Soon !!
    Gra
    18th Dec 2014
    3:04pm
    Too bad the ACCC doesn't go after the oil companies who are the real bandits in this world. The Telstra ad sounds to be no different to any other ads placed in newspapers by other Telcos, car dealers and many other types of business. I can't remember any ads from these companies where there aren't some form of added charges mentioned in the fine print.
    Anyone who doesn't read the fine print is just asking to be shocked with an added charge.
    particolor
    18th Dec 2014
    9:25pm
    I wonder if the ALF on other Planets behave like they do on Earth ??
    wally
    21st Dec 2014
    5:17pm
    Yep. Let the buyer beware.
    Dickb
    18th Dec 2014
    3:42pm
    I have a 40 inch TV and even then these fine print conditions are almost impossible to read unless you sit close to the screen. I believe all conditions and fine print terms and conditions in newspapers and on TV should be the same size or similar to the gotcha text and be in a colour that you can read (in teh case of newspapers particularly).
    Polly Esther
    18th Dec 2014
    4:02pm
    This is a good lesson for each and everyone. Again if something seems too good to be true then rest assured there is usually a big snag somewhere, just waiting to hook onto the unwary. The old saying goes 'there is no such thing as a free lunch" and it has nothing to do with feeding your face. Having said that however,this sounds like, in my opinion, nothing more than a somewhat feeble gesture by the ACCC attempting to imply to the public, oh look at us we are doing our job. And so they jolly well should, by cracking down on what seems to be, again my opinion, corporate fraud. "Not everyone will read the fine print". Just maybe the fine should have been at the least ten times that amount. Even a whole lot more.
    The toothless tiger strikes again.
    Tom Tank
    18th Dec 2014
    4:42pm
    Penalties should be related to gross income. This should apply to individuals as well as companies and the circumstances, including penalty imposed, gross income earned and tax paid on that income.
    If the penalty applied to Telstra for this offence was 10% then that would be appropriate especially if we all learnt details of gross earnings and tax paid as that publicity would not be welcome.
    The other alternative would be a custodial sentence as company executives would really be frightened of that penalty. We are way too soft on white collar crime.
    Wendy HK
    19th Dec 2014
    7:17am
    I've worked it out that relative to their profit / my income - that would be like fining me .5 of a cent. Big deterrent to doing it again - I don't think!
    Hillbillypete
    18th Dec 2014
    6:41pm
    That's nothing to what else they do day by day, the moment we are out of were we live Telstra will be buried for good.
    particolor
    18th Dec 2014
    8:24pm
    No the fine was Quiet Adequate ! It was about as Equivalent as Fining Me 5 Cents for not Smiling at the Security Camera in the Shopping Centre ??
    LENYJAC
    18th Dec 2014
    8:49pm
    WHAT A GUTLESS FINE, BUT THATS WHAT TO EXPECT FROM ACCC.. WHY DONT THEY CHASE FUEL COMPANYS FOR RIPPING US OF EVERY DAY???????
    particolor
    18th Dec 2014
    9:17pm
    Cant do that ?? Too many High Up Elite have too many Shares in them !!
    Abby
    20th Dec 2014
    4:42pm
    A bit of cheap advertizing that Telstra got as a result of ACCC proceeding
    particolor
    20th Dec 2014
    7:23pm
    I'm still Dumping them when the Contract Runs Out !!
    wally
    21st Dec 2014
    5:21pm
    +Sounds like jumping out of the frying pan into the fire.
























    Sounds like jumping out of the frying pan into the fire. Or another frying pan.
    particolor
    21st Dec 2014
    7:09pm
    I wont have any !! Its a RIP OFF in Australia !
    jamesmn
    23rd Dec 2014
    8:29am
    yes Telstra should have been fined so it really hurt or is Telstra in bed with the accc ? now we have advertising on top of our e/mails if you use yahoo 7 cant get rid of them was never asked if I wanted them I've already clicked the box for no advertising will be definitely changing from yahoo7 mail its a invasion of privacy they are even putting adds on games you play on the internet why don't these companies realise that any company that advertises in this way people don't have anything to do with them they need to be fined as well.
    particolor
    23rd Dec 2014
    9:38am
    They must be Islamic Adds ??


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles