Dodo forced to pay refunds for ‘perfect’ NBN plans

Dodo is to pay refunds over claims about NBN plans it said were ‘perfect for streaming’.

Vocus CEO Kevin Russell. Picture: Hollie Adams

Vocus’s retail broadband business Dodo will dole out up to $360,000 in refunds over dodgy claims about its entry-level NBN plans.

Dodo will give refunds to around 16,000 customers as part of a court-enforceable undertaking made to the Australian Competition and Consumer Commission (ACCC) after Dodo admitted that it had oversold its plans as being “perfect for streaming”.

From November 2015 to March 2018, Dodo advertised its NBN broadband plans, including those with maximum speeds of 12 megabits per second (Mbps), as being “perfect for streaming”.

According to the ACCC, some of the plans offered by Dodo only had 10 gigabytes (GB) of included data; a quota insufficient for extended use of streaming media services.

The regulator’s chairman Rod Sims said that the plans sold by Dodo where wholly unsuitable for video streaming.

“We were concerned that Dodo customers on these plans could not reliably stream high quality video, particularly when others in the household were using the internet at the same time.”

“At 12Mbps, Dodo’s customers could not stream ultra HD video at all,” he said.

He added that the monthly quota of 10 gigabytes would have seen Dodo customers use up their data allowance after only a modest amount of streaming

“According to Netflix, high definition streaming uses up to 3GB of data per hour. With these plans a customer would have to pay extra if they streamed just two or three movies.”

“We don’t believe NBN plans with just 10GB of included data are ‘perfect for streaming’.” Mr Sims said.

“It is simply unacceptable for an internet service provider to tell consumers that their services are ‘perfect’ for a particular use, and to then charge them extra when they use the service as advertised.”

As part of the undertaking, Dodo will refund the excess data charges to current and former customers who signed up to a 10GB entry-level NBN plan.

It will also allow current customers to exit their contract without charge.

Dodo and iPrimus are part of Vocus’s retail broadband business, which has been struggling in the market.

Vocus boss Kevin Russell told investors last week that the retail business had been undermined by the NBN.

“There is (ongoing) erosion of voice customers and we have lost broadband customers during the migration to the National Broadband Network.

“NBN favours the Telstras of the world, the big premium brands and value brands like Dodo do get squeezed,” he said.

In the last 24 months, Vocus has lost 84,000 NBN broadband customers to rivals. It has also shed broadband customers as they moved from ADSL services to the NBN, with an estimated 182,000 lost during the last 24 months.

The head of Vocus’s consumer business, Antony de Jong, apologised to customers on Wednesday, saying that the telco had stopped selling the streaming-focused 12Mbps plan some time ago.

“Doing the right thing by our customers is our focus and we apologise for our error.

“Our team will contact impacted current and former customers as soon as possible,” he said.