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Who You Going To Call? Phone-Busters?

6th July 2018

What a month May was for telecommunication providers!

Optus has been penalised $1.5m for misrepresentations about NBN transitioning and Telstra has to pay court costs because they engaged in misleading and deceptive conduct.

The Australian Consumer and Conduct Commission (ACCC) have let us know that about 14,000 customers over a year and half had been told by Optus that their services would be disconnected within a short period of time if they didn’t switch to the NBN. In reality, Optus could not contractually force people to be disconnected in the timeframes they were telling people. Optus also misleadingly represented to customers that they were required to sign up to Optus NBN services when they were actually free to choose any internet service provider they wanted to. There were about $750,000 in benefits obtained by Optus as a result of the conduct and Optus has since had to pay $833,000 in compensation to affected customers for disconnecting their services and has been penalised for their conduct.

Over in the Federal Court case of Optus Mobile Pty Ltd v Telstra Corporation Limited [2018] FCA 745 it seems the telco giants want to battle it out as to who has mislead customers more.

The argument here is that by publishing various advertisements using the word “Unlimited” Telstra engaged in misleading or deceptive conduct. The ads stated  “one word from Australia’s best mobile network. Unlimited.” The Court has found that this could reasonably be interpreted as representing that Telstra offered mobile services with no limitations – presumably referring to download speeds, the amount of data and no interruption or delay. It was decided that the advertisement falsely conveyed those representations.

The advertisements were about Telstra’s “Endless Data BYO Plan”. The plan included 40GB of data at uncapped speeds. After that, speeds were actually capped at 1.5Mbps for the rest of the month and slowed down even more during busy periods.

Further, the ads falsely represented that Telstra’s mobile network provided unlimited coverage throughout Australia. Now that’s a reason to get a new phone and mobile plan! However the Court thought that another reasonable interpretation of the advertisements was the false representation that Telstra offered the mobile product or service that could be used on any kind of mobile device that could operate through Telstra’s mobile network.

Telstra’s “Unlimited” advertisement campaign was found to contravene s34 of the Australian Consumer Law (ACL) because they were likely to mislead the public about the nature and/or characteristics of Telstra’s mobile services. That is, the mobile plans and services were not “unlimited” and were actually limited by plans or prepaid arrangements as to the amount or speed of data and limited by the network’s geographical coverage.

However, the Court did consider there was one exception. The “unlimited” representations were not representations that services were of a particular quality or that they had performance characteristics which was a point Optus argued. The Court said the representations were that Telstra offered services that it did not actually offer at all. The representations therefore did not contravene s29(1)(b) or (g) of the ACL. The exception was a representation that a particular “SIM-only plan for $69/mth” was unlimited. The representation about unlimited geographical coverage was a representation that Telstra offered services that it did not in fact offer at all.

The Court made declarations and ordered Telstra to pay Optus’ costs to date. There is going to be a further hearing on injunctive and other relief at a later date so watch this space.

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