TPG beats ACCC case seeking compo for prepayment charge

Watchdog fails in court bid to reclaim ‘prepayment’ fees charged to TPG customers.

A judge said TPG Telecom's website made clear the charges faced by customers. Picture: AAP

TPG Telecom has beaten the competition regulator over allegations that it was pocketing an extra $20 from customers through a non-refundable “prepayment” charge.

The Australian Competition and Consumer Commission (ACCC) took TPG to court last December, alleging that the telco had made millions of dollars from prepayments that were forfeited.

However, in a judgment handed down by the Federal Court on Friday, Justice David O’Callaghan said TPG’s action was justified.

“TPG has shown that the forfeiture term is reasonably necessary to protect its legitimate interests,” Justice O’Callaghan wrote in his judgment.

The telco’s general counsel, Tony Moffatt, said the judgment had vindicated TPG’s position as a challenger telco in the market.

“TPG has always strived to be a competitive force in the market to bring great benefit for consumers in terms of price and value, as part of those efforts, we have always looked for innovative ways to be more efficient.

“We were disappointed that the ACCC decided to bring these proceedings against TPG and are pleased to have been vindicated by the court,” he said in a statement

TPG had highlighted on its website since March 2013 that the prepayment of $20 could be used to cover costs that might be incurred but were not included in a customer’s plan, such as overseas phone calls.

However, the prepayment operated as a non-refundable fee, with TPG retaining at least $10 of the prepayment when a customer cancelled the plan, a detail that the ACCC alleged the telco had not clearly spelled out to customers.

The regulator was seeking penalties and compensation for consumers.

Justice O’Callaghan rejected the regulator’s claims in his judgment, saying that consumers were not 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.

“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,” he wrote.

The ‘prepayment” case is a relatively minor skirmish between TPG and the ACCC, with the telco hoping for a bigger win against the regulator on its proposed $15 billion merger with Vodafone Hutchison Australia.

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