ACCC threatens telcos with fines for misleading advertising

ACCC says it is prepared to sue executives who approve misleading ads.

Telcos warned over false advertising

The Australian Competition Consumer Commission (ACCC) has put telecommunications companies on notice over dodgy advertising and is ready to impose hefty fines unless they change their ways.

ACCC chair Rod Sims said telecommunications companies need to ensure their advertising is clear and transparent or face legal action, including much higher penalties.

Mr Sims also said the ACCC may bring proceedings against executives who knowingly approved misleading advertising.

Earlier this year the ACCC began investigating Optus, Vodafone and Telstra’s use of the term ‘unlimited’ to promote mobile data plans, concurrent with private litigation brought by Optus against Telstra in the Federal Court.

Between March and June 2018, Optus, Vodafone and Telstra 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.

The ACCC found that:

  • Optus’ ‘unlimited’ plan imposed a 1.5Mbps speed restriction on tethering, streaming and downloads. Heavy data users could also be deprioritised during congestion.
  • Vodafone’s ‘unlimited’ plan provided an initial data allowance at usual speeds, after which all usage was speed capped at 1.5Mbps.
  • Telstra’s ‘unlimited’ plans provided 40GB at usual speeds, after which all usage was slowed to 1.5Mbps and slowed further during busy periods.

The headline claims were, in most cases, qualified with disclaimers that were not sufficiently prominent or clear to inform consumers of the existence and impact of the limitations, in the ACCC’s view.

The Court considered Telstra advertisements with the tagline “One word for Australia’s best mobile network. Unlimited,” and found they were misleading or deceptive, in contravention of the Australian Consumer Law.

The Court found they falsely conveyed to consumers that Telstra provided plans offering unlimited usage of its mobile network when in fact its services, including mobile data services, were always subject to use limitations and exclusions.

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,” Mr 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. From now on, consumer law penalties will seriously affect their bottom line, and we will not hesitate to seek the highest possible penalties.”

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    COMMENTS

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    MICK
    19th Sep 2018
    10:44am
    Don't even get me started on the ACCC, one of our dead in the water regulators which ignore scam tip-offs and send back responses to fob the public off, not to address problems requiring little more than a 5 minute phone call.

    The TIO (Telecommunications Ombudsmans Office)? An Industry Body acting for industry. Been there done that.
    Optus disconnected us for 2 months, refused to fix the problem until the bitter end and then walked away from paying MANDATED compensation. The TIO was its partner in crime.

    Don't expect anything from the ACCC. Recent media coverage from Sims shows an apparent relationship with this government's policies so now sold out. I hope Labor shuts down the ACCC and starts again with new staff who take their job seriously. At present the ACCC is a waste of public money and an abuse of purpose.
    Anonymous
    20th Sep 2018
    2:34pm
    The TIO is a pathetic joke, Mick. They claim to be "independent", but are funded by the telcos when you complaim to them about your telco. It's in the TIO's own interest not to resolve issues, because if they did, their funding-source would dry up.
    HarrysOpinion
    19th Sep 2018
    10:51am
    It's all very well for ACCC to collect hefty fines for the government's treasury from misleading and cheating Telcos but what financial compensation do consumers get?...
    HarrysOpinion
    19th Sep 2018
    10:55am
    Ah...yes...of course ...it's all treasured to plan corporate tax cuts ...What a joke!!!
    MICK
    19th Sep 2018
    11:28am
    Consumers get done over and then shafted with legislation which is legislation in name only. That's the game.
    Old Geezer
    19th Sep 2018
    11:12am
    Ban those hideous contracts that give nothing extra to the consumer but fleece the consumer if they don't honour them.
    Anonymous
    20th Sep 2018
    2:38pm
    The so-called 'contracts' with telcos are often just verbal agreements to a long list of Terms and Conditions read out over the phone by someone with an impenetrable foreign accent. It's bloody ridiculous! I don't regard ANYTHING as a contract unless it's something I've read and signed.
    Anonymous
    20th Sep 2018
    2:41pm
    But you can't read fine print Knows-a-lot.
    You just want to blame the provider for your own ignorance

    19th Sep 2018
    12:45pm
    They should go after ING next, on TV they blatantly advertise no overseas credit/exchange fees and forget to mention that you need to put at least about a $1000 a month in the account
    Old Geezer
    19th Sep 2018
    1:57pm
    Doesn't ING rebate fees if you use Paywave too? We were told we had to use a pin as it was more secure and now they bring in Paywave that bypasses that security. That's simply wrong on so many levels.
    Old Geezer
    19th Sep 2018
    2:10pm
    I recently used a 28Degrees Credit Card and got charged no overseas exchange fees and their exchange rates were at least equal to the exchange rates traded on forex trading sites. I just applied online and they sent me one within about a week.

    19th Sep 2018
    1:14pm
    Ban the labor party for false advertising saying that actually care for our citizens
    Julia should be in jail for the “no carbon tax “ lie
    Old Geezer
    19th Sep 2018
    1:55pm
    What about the deal done with Kerryn Phelps by Labor in order to try and win Wentworth and take over the government by the back door? Shame on Labor for doing this.
    Anonymous
    19th Sep 2018
    2:08pm
    Didnt expect anything less from the slimy deceitful party.

    Ban the labor party
    Old Geezer
    19th Sep 2018
    2:11pm
    I thought Liberals were bad enough but Labor is starting to really stink.
    Anonymous
    20th Sep 2018
    2:41pm
    Ban the Lieberal Party (and its trolls) because these incompetent nincompoops have wrecked this country.
    Anonymous
    20th Sep 2018
    2:42pm
    Rodent John Howard should be in jail for his "There'll be no GST under a Howard Government" lie.
    Anonymous
    20th Sep 2018
    2:44pm
    He never said that - u shud be charged with defamation
    JoJozep
    20th Sep 2018
    10:42am
    What's with Olbaid and Old Geezer?. When was the last time they cleaned their noses?

    What, they can't smell their own stink? So they can't smell where the liberals/NCP walk let alone where they sit in parliament Hasn't the LNP chaos all last few weeks warranted chucking out these self centered bloodsuckers. ScoMo the prime dickhead makes me sick with his clever lies and cover ups. He either blames someone else, sucks up to Hutton or denies all previous associations with whatever he thinks doesn't cover his arse properly. The majority of Australians never voted for this sinister imbecile, he did exactly what any other dictator did and bullied his way to the top, supported by powerful cheating and disgusting Media Moguls, who whitewash the public with supposedly doing good deeds to get the readers on side. Like one prominent liberal supporter famously said "pigs arse", I wouldn't vote for the current LNP even if they tried to bribe me as they did in the past. The last time I bought the Herald was when it cost threepence, or tuppence, I can't remember. So much for the present crawlers.

    Before everyone jumps on the ACCC and the Ombudsman for not doing their job properly, let's look into why they may have been seemingly slow to Act against the big business practices like Banks, Superannuation and Insurance companies to name a few.

    Firstly, the policing powers and effectiveness of Departments depend on funding. Who cut the funding and staff of the ACCC? Come in Scotty. Who changed laws of negligence by the big boys to make the laws less effective? Come in Scotty. Who penalized aged people for getting old by cutting pensions and making old peoples homes unaffordable? Come in Scotty. Who tried to give his big end of town mates a multi billion dollar payout? Come in Scotty. I thought Abbott was bad news, but ScoMo leaves him for dead.

    Let's hear loud and clear from the 51% of the population (females) what they think of this present government. I remind them, the LNP politicians are still trying to maintain the Feudal system, where the Lord of the Manor was born rich, and he could have his way with any peasant (predominantly female) as though it was his right of passage. Has anyone wondered why you never hear of the Lordess of the Manor? Yes, the old Master-Slave relationship is still alive today, and keenly fought for by the ruling party. Have you ever seen a poorly dressed politician on TV. I tell you what however, I've seen many more poorly dressed homeless people on the streets.

    Where in the past everyone (except First Australians) was proud to be called an Australian, whether White Australian settler, White Australian convict or multinational Migrant, and more recently, the ignored First Australians, as soon as the LNP got in, the racial wars began. Under Hutton, there are good people (LNP, qualified Citizens, White Australians, White migrants, White descendants and Au pair girls) and bad people (Dark skinned people, non English speaking people, poor overseas people, boat people, refugees, religious minorities and any one else Hutton doesn't consider to his liking). and ScoMo expects us to vote for him and his egocentric party? Come on Aussie come on.

    So who dragged ScoMo kicking and screaming to make recent announcements? A new Royal commission into Aged Care Facilities for example. No government funding towards the upkeep of these homes? This is not new. For the past 10 years, funding has been left to private entrepreneurs to buy expensive properties, develop the aged care homes, charge over a million dollars RAD per resident and offer a measly single bedroom and toilet. As if getting close to 6% return on this money (that's $60,000 per annum) wasn't enough, they gouge another $20-40,000 for meals and "care" and the government, not to be left behind, in this gouging exercise, charges around an extra $73 per day or $27,000 per year. So unless you can find around $100,000 per resident in fees per year, don't try getting your loved one into one. Thank you Scotty for helping out this group of people with your words of wisdom.

    I imagine, he's put two and two together, and knowing his party will be demolished come next year's elections, wants Labour to pick up the tab. He makes no apology for his party doing anything to help the poor and disadvantaged over the past 5 years. A pox on the LNP, and his powerful media barons who have ruined this country. So Olbaid, shut up unless you can prove anything you state in your stupid statements.

    Where is the leadership? Wake up Australia before we slide into oblivion.

    20th Sep 2018
    2:32pm
    The sooner there's a Royal Commission into the whole telco sector the better. (I've been saying this for ages!) Where they really rip you off is with data overrun charges, because they're allowed by the Telecommunications Consumer Protection [TCP] Code up to 48 hours to update their data usage webpages, during which you can unwittingly experience very expensive multiple data overruns, followed by bill-shock.
    Linda
    22nd Sep 2018
    1:19pm
    I am on pay as I go monthly, what seriously bothers me, is the renewal deadline is always moved up about 3 days. Telstra is my mobile provider because it has the best coverage. I rarely even come close to using up my allocated data and calls.


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