The Australian Competition and Consumer Commission has claimed that ISP Activ8me is guilty of breaching the Australian Consumer Law and taking Federal Court action against the company.
The ACCC alleges that a range of Activ8me direct mail and online banner ads for Opticomm fibre-to-the-premises (FTTP) packages were false or misleading (Opticomm is not accused of any wrongdoing by the ACCC).
The direct mail ads were sent to more than 60,000 households.
“Activ8me sent thousands of advertisements with allegedly false or misleading claims about the speed, data limits and costs of its internet services,” said ACCC deputy chair Delia Rickard in a statement.
The commission claims that consumers were told they could receive speeds of up to 100 megabits a second for $59.95 a month with no setup fee. However, the $59.95 plan had maximum speeds of 12/1Mbps and a setup fee of $99.95 applied unless an individual signed up to a 12-month contract, the ACCC said.
The ACCC said that Activ8me also mislead by claiming to offer unlimited downloads, when the telco could “suspend access or charge more for data use it deemed ‘unreasonable’.”
Earlier this year the ACCC announced it had fined Activ8me. The ACCC said that Activ8me had implied its services had the commission's endorsement with a tag line that read “Named Australia’s #1 Sky MusterTM provider by the ACCC”.
“Our decision to take court proceedings this time shows how seriously the ACCC takes Activ8me’s further conduct,” Rickard said.
Activ8me has been approached for comment.
Today’s announcement follows the ACCC yesterday initiating Federal Court action against TPG for allegedly misleading consumers.
The legal action by the ACCC relates to a $20 ‘prepayment’ that some TPG customers paid. TPG has indicated it intends to defend itself.
The ACCC believes that since March 2013 TPG has received prepayments totalling millions of dollars.
Last year the ACCC announced it had accepted court-enforceable undertakings from TPG, Optus, Telstra and Vocus relating to the sale of NBN services. The ACCC took action after telcos sold consumers FTTN and FTTB services that had higher theoretical maximum speeds than their lines were capable of.