Major telcos to face court for allegedly misleading consumers over NBN speeds

Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), is taking three of the nations major telcos to Federal Court, alleging they misled hundreds and thousands of consumers over NBN speeds.

The ACCC says Telstra, Optus and TPG allegedly mislead people in the promotion of some 50Mbps and 100Mbps NBN plans, which is a direct breach of Australian consumer law. The watchdog also alleges the three companies accepted payments from some customers despite being unable to provide them with the promised NBN speeds.

In a statement issued by the ACCC on Monday, the watchdog alleged that the companies told some 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.

Rod Sims, ACCC chair said they were “very disappointed” that the companies had not taken the correct action, and said the most concerning thing was that the companies were allegedly aware of the issues.

“Telstra, Optus and TPG each 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. Instead, we allege, they failed to do these things, and as a result, many consumers paid more for their NBN plans than they needed to,” he said.

“Collectively, hundreds of thousands of consumers were allegedly misled by these three big internet providers, Telstra, Optus and TPG, which accepted payments for NBN speeds they could not provide.

“What makes this behaviour even more concerning is that 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.

“We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC.”

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.

Sims said the three telcos had promised to compensate affected consumers even before the case had been finalised in court.

“Internet speed is one of the main features consumers look for when choosing their NBN plan, but it can be complex, confusing and time-consuming for them to understand the features of advertised NBN services and they cannot check their maximum speed themselves,” he said. “It is important that internet providers like Telstra, Optus and TPG give their customers accurate information so they can make an informed choice about the service that best suits their needs and budget.

“We are pleased that Telstra, Optus and TPG have promised to compensate consumers even before the court case is finalised.”

Current and former customers who are affected will be contacted if they are eligible for a refund, and offer alternative plans, or an opportunity to leave their contract without penalty. Consumers may also contact their provider directly for further information.