Court finds TPG broadband ads misled consumers

ACCC claims victory in trade practices advertising

The Federal Court has found advertising for internet service provider TPG’s $29.99 Unlimited ADSL2+ campaign to be false and misleading.

In Melbourne, Justice Murphy found the advertisements represented that consumers could acquire the broadband service for $29.99 per month without having to use additional services or pay any additional monthly charge.

TPG’s campaign included TV, newspaper, radio and website advertisements. A directions hearing will be held on Tuesday 15 November 2011 to set a date for a penalty hearing.

Chairman of the Australian Compeition and Consumer Commission (ACCC), Rob Sims, said telcos must include clear and accurate information in their advertisements.

“This should provide a further warning to the telecommunications industry that they must get their advertisements right," he said in a statement.

The ACCC first instituted legal proceedings against TPG for the campaign in December 2010.

According to the ACCC, the ADSL2+ plan was actually $59.99 per month because the ADSL2+ service was only available when bought with home line rental from TPG at an additional cost of $30 per month.

“It is an unfair trade practice to require consumers to find their way through to the truth past advertising stratagems which have the effect of misleading or being likely to mislead them,” Justice Murphy stated in his judgment.

The court also found TPG did not disclose the obligation to pay additional up front charges in earlier advertisements, including a $129.95 set up fee and a $20 home phone deposit. The ACCC contends the advertisements also did not prominently specify the minimum charge.

The Telecommunications Industry Ombudsman (TIO) this week released its 2011 annual report, which details 197,682 new complaints received 2010-11, an increase of almost 18 per cent on the previous year. The rise is mainly due to mobile phone service faults and increased smart phones use, according to the ombudsman, Simon Cohen.

TIO findings for 2011

  • More than half the new complaints received by the TIO (more than 112,000) were about mobile phone services, an increase of 51 per cent from the previous year.
  • Of these, more than 32,000 were about Vodafone, almost tripling the number of its new mobile phone complaints when compared to the previous year.
  • The most common mobile phone complaint issue was about service faults, with 56475 new complaints made to the TIO, a 180 per cent increase.
  • Consumers were most concerned about poor mobile coverage and service drop-outs.
  • There was a 26 per cent increase (to 4222) in disputes about internet charges on mobile service. Many of the remaining new mobile phone complaints could be attributed to inadequate information provided to consumers about the costs associated with smart phones and related billing disputes, the TIO said.

    The report is available online at www.tio.com.au/annualreport.

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More about: ACCC, TPG, Vodafone
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Tags: Trade Practices Act 1974, accc, TPG, court case, legal, adsl2, broadband, Telecommunications
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