Misleading mobile phone brochure leads to apology

A misleading promotional brochure for a mobile phone package has led to a mobile telephone network wholesaler, Signal Telecommunications and a reseller, Digital Discount Centre providing court-enforceable undertakings.

The action follows negotiations between the Australian Competition and Consumer Commission (ACCC) and both companies after consumer complaint sparked an ACCC investigation.

From March 1998 to August 1998, Signal, through Digital Discount Centre, promoted a mobile phone package, referred to as the "Phone Saver Plan 25", through a brochure that was distributed at more than 50 petrol station sites across Victoria.

According to an ACCC statement, the brochure did not disclose several costs that would be incurred by customers and in particular failed to disclose the applicability of a minimum call cost during off-peak periods. This, the ACCC said, compromised the ability of consumers to make informed decisions.

"Mobile phone providers must clearly disclose the substance and effect of all conditions, particularly those conditions relating to price," said ACCC chairman, Professor Allan Fels.

Under the agreement, both Signal and Digital Discount Centre will write a letter of apology to all affected customers informing them that:

* Signal will not take action over early termination of network contracts;* Signal will give active customers a $50 credit to go towards payment of their account;* Active customers are able to exit the contract without fear of penalty.

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