ACCC appeals TPG ‘prepayment’ ruling

The ACCC is not giving up trying to make TPG pay for allegedly misleading its customers over ‘prepayments’.

TPG Telecom's website. Picture: AAP

The consumer watchdog isn’t giving up its fight to make TPG Telecom pay for allegedly misleading its customers over “prepayments”, appealing its recent loss on the matter in the Federal Court.

The Australian Competition and Consumer Commission’s efforts to take TPG to task for allegedly pocketing an extra $20 from customers through a non-refundable “prepayment” charge was stymied by the Federal Court in October.

However, the regulator said on Friday that it will contest the decision, adding that its core objection remains valid.

“We alleged that by representing this was a ‘prepayment’, consumers were misled by TPG into thinking they could use all the money they had prepaid for out-of-plan services, when this was not usually possible,” ACCC Chair Rod Sims said.

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The trial judge, Justice David O’Callaghan, did not accept the ACCC’s argument that the operation of TPG’s “prepayment” arrangements was not adequately disclosed to consumers.

According to Justice O’Callaghan, consumers were never left in the dark about the nature of the charges.

“The information displayed on the TPG website is not fleeting or momentary, but may be viewed and digested at whatever pace the individual consumer chooses,” he said in his ruling.

“In my view, a reasonable or ordinary prospective purchaser of retail mobile, internet and home telephone services would take the time to ascertain the contractual terms of importance to them, including reading the whole of the clause that contains the forfeiture term under the heading “important things you need to know”, before entering into a transaction to buy a relevant plan.”

The ACCC on Friday challenged that assessment, with Mr Sims saying TPG’s disclosure did not go far enough.

“We are appealing from this decision because we believe the court made an error in deciding that TPG’s representations about this mandatory prepayment were not false or misleading.

“Consumer awareness of important terms should not be expected where they are contained in the fine print of a long and detailed contract or, in the case of online contracts, after multiple clicks.”

“We remain concerned that TPG misled its prepaid customers about their ability to use up their full prepayment and to obtain a refund of any unused funds when they ended their contract,” he added.

A hearing for the appeal before the Full Federal Court will be fixed at a later date.

The “prepayment” issue is a minor skirmish between the competition regulator and TPG, with decision still pending on the telco’s blockbuster $15 billion merger with Vodafone Hutchison Australia.

The ACCC has rejected the merger, saying that the tie-up will turn the mobile market into a three-horse race and insists that TPG has the capacity to launch a fourth mobile network.

However, TPG boss David Teoh has made it clear in the subsequent legal stoush between the telco and the ACCC that the telco no longer has any plans to roll out a mobile network.

With the three-week long appeal process behind them a final verdict from Justice John Middleton on the merger is expected to land early next year.