Internet service providers to refund NBN customers or face litigation, says ACCC

THE country’s consumer watchdog has put internet service providers on notice, saying NBN customers should expect refund offers in the near future.

IF YOU bought an NBN home broadband package but haven’t received the speeds you paid for, you can expect a refund in the near future.

The boss of the Australian Competition and Consumer Commission, Rod Sims, has fired a warning shot at retail service providers like Optus and TPG saying if they don’t work to refund customers who paid for unattainable speeds, they can expect litigation.

It comes after Telstra submitted a court-enforceable undertaking to the consumer watchdog outlining how it will provide refunds or special offers to about 42,000 customers who paid for unattainable speeds on their NBN service.

Certain telcos have been accused of knowingly selling packages to customers on fibre-to-the-node NBN connections that were incapable of providing the top tier speeds of 100 Mbps, or even 50 Mbps.

“We’ve been warning [ISPs] for some time that we were concerned about this kind of behaviour,” Mr Sims told news.com.au.

“Now that we’ve got this undertaking from Telstra, we’ll be approaching most other ISPs to say we’d like an undertaking in similar terms and if we don’t get it, there’s a very real chance there will be litigation to follow,” he said.

Telstra first publicly signalled it was aware of customers being overcharged in May and said it would begin identifying and contacting customers who were considered eligible for a refund. In August, Optus said it would follow suit but has since been light on the details.

“Optus were more engaging publicly than they were with us,” Mr Sims said. “They were saying things in public about what they will do, we will start engaging with them right now.

“I think most of the other ISPs are in a similar position but you think given those statements, Optus should have no problem providing a similar undertaking [to Telstra].”

Internet service providers need to refund NBN customers over speed failure or face litigation, says ACCC boss.

NEW ACTIVATION PROCESS TO STAMP OUT PROBLEM

As part of the submission to the ACCC, Telstra said when connecting customers in the future it will perform a test to check if the end-user can reach the download speeds they purchased.

“This is crucial,” Mr Sims said. “They’ve undertaken that when they activate new customers they will check to see whether the customer can get the speeds they’ve been sold and if they can’t they will quickly remedy the situation.”

Mr Sims said once this is in place across the industry it will put an end to the blame game between NBN Co. and the telcos.

“If you can’t get, for example, 25Mbps on your service you’ll be almost certain it’s because the retailer didn’t buy enough capacity” from the NBN, he said.

“This goes a long way to ending the finger pointing so we know where the problems lie in the future.”

Most of the customers eligible for a refund will likely be connected to the NBN via the most common fibre-to-the-node connection.

“Fibre-to-the-node has difficulty supporting 100 Mbps or 50 Mbps, but 98 per cent of the time it can support 25 Mbps,” Mr Sims said.

“So it’s very likely that if you’re on a 25Mbps, even if it’s fibre-to-the-node, if you’re having problems it’s very likely your retailer hasn’t bought enough capacity from the NBN.”

Rod Sims says the new measures being brought into the industry will stop the NBN blame game. Picture: Josie Hayden