Largest Aussie telcos slapped with massive fines for misleading customers on NBN plans

Australia’s three largest internet providers have been handed whopping fines for making misleading statements in ads about their NBN speeds.

Australia’s three largest telcos have been ordered to pay eye-watering fines for lying to customers in their ads about NBN internet plans.

Telstra will fork out $15m, Optus $13.5m and TPG $5m after admitting they made false or misleading representations over their 50 or 100 megabyte per second (mbps) fibre to the node (FTTN) plans.

The fines total $33.5m after the consumer watchdog brought proceedings against the tech giants.

The Australian Competition and Consumer Watchdog (ACCC) said all three internet service providers promised to tell customers within a reasonable time frame if the speeds they were paying for could not be reached on their NBN connections.

One of the advertisements TPG issued about its NBN internet plan, with emphasis on the misleading or false representation in red.

They also said they would offer customers options, including moving to cheaper plans with a refund, if they could not reach the maximum speed on their plans.

All three companies have admitted their statements were false or misleading and in breach of Australian Consumer Law.

None of them had adequate systems, policies and processes in place to ensure they would do what they said they would, ACCC commissioner Liza Carver said.

“Fast and reliable internet is a necessity for Australian households; consumers need accurate information when choosing the best internet plan to meet their needs,” she said.

One such ad by TPG offered typical evening speeds of up to 43.7mbps.

At the bottom of its information, it stated the company would inform customers of their maximum line sync speed when available. Its disclaimer stated people on higher speed NBN plans could “downgrade” to a lower speed plan without penalties.

The ACCC said Optus, Telstra and TPG did not have adequate systems and policies in place to ensure customers would be moved to cheaper plans with a refund if they could not achieve the maximum speeds on their NBN plans. Picture: NCA NewsWire / Andrew Henshaw

The ACCC said the misleading statements were made on Optus, Telstra and TPG’s websites and in emails and telesales.

They affected nearly 120,000 people and were made for at least 12 months between 2019 and 2020.

Telstra, Optus and TPG also admitted by failing to notify consumers whose maximum attainable speeds were lower than the speed of their purchased plan, they had falsely represented their NBN connections were capable of attaining the higher speeds.

“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,” Ms Carver said.

“(These) businesses 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.”

Telstra was fined $15m after the ACCC took the company, along with Optus and TPG, to court. All three have been fined a combined $33.5m. Picture: NCA NewsWire / David Mariuz

The whopping fines come after the ACCC took the telcos to court over their statements to potential customers last year.

All three companies have provided refunds to impacted customers.

In late 2017, Telstra, Optus and TPG provided court-enforceable undertakings to provide remedies to customers after they had promoted NBN plans with specific maximum speeds that could not be reached.