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Australia’s big three to pay $33.5m for misleading speed claims

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Telstra Corporation (Telstra), Optus Internet (Optus), and TPG Internet (TPG), have been ordered by the Australian Federal Court to pay penalties of $33.5 million.

The ruling came after each company admitted mispresenting certain NBN internet plans, in proceedings brought by the Australian Competition & Consumer Commission (ACCC).

Specifically, Telstra was ordered to pay $15 million; Optus was ordered to pay $13.5 million, and TPG ordered to pay $5 million in fines for breaching the Australian Consumer Law (ACL) by making false or misleading statements in relation to their 50Mbps or 100Mbps fibre to the node plans. They were also required to pay part of the ACCC’s costs.

On their websites, in emails to roughly 120,000 consumers or in telesales, Telstra, Optus and TPG each promised to tell consumers within a reasonable timeframe if the speeds they were paying for could not be reached on their NBN connections. They also offered consumers options, including to move to a cheaper plan with a refund, if they could not deliver the maximum speed on their plans.

All three companies admitted that their statements were false or misleading, in breach of the ACL, because they did not have adequate systems, processes and policies in place to honour these commitments.

Additionally, by failing to notify consumers whose maximum attainable speeds were lower than the speed of their purchased plan, all three had misrepresented that their NBN connections were capable of attaining the higher speeds.

“These significant penalties reflect the seriousness of the breaches of consumer laws by these large and sophisticated businesses that should be better informed about their obligations towards their customers, particularly given the promises they made to their customers and in undertakings previously provided to the ACCC regarding speed claims for their NBN plans in 2017,” said Liza Carver, ACCC Commissioner.

“Some customers may have paid for a 50 or 100 Mbps plan believing their NBN connection could support the higher download speeds, even though they would have been better off paying for a lower speed plan.”

Telstra, Optus, and TPG have all implemented remediation programs and have already contacted impacted customers to provide refunds. Optus has been ordered to re-contact affected customers who have not responded or been credited, to offer compensation within 120 days.

TPG was ordered to implement an ACL compliance program, while Optus was ordered to update its existing compliance program. Telstra already has ACL compliance program in place.