A Melbourne internet provider has been ordered to pay a whopping $250,000 penalty for misleading information in its advertisements.
The Federal Court also instructed Activ8me, based in the Melbourne suburb of Preston, to refund setup charges to impacted customers and allow them to leave or switch plans without penalty.
During the case, the NBN retailer admitted that it made false or misleading claims in multiple direct mail and online banner ads between June and November last year.
The Australian Competition and Consumer Commission submitted to the court that Activ8me told potential customers its $59.95 month plan would allow them download speeds of up to 100Mbps, even though that product capped the speed at 12Mbps.
The actual price of the 100Mbps plan was $89.95 per month.
The ads also stated there was no setup fee, even though a $99.95 charge applied if the customer didn’t sign up to a 12-month contract.
The company also made other false claims regarding “price, inclusion of ‘unlimited’ data, speed and total minimum costs”.
This wasn’t the first time Activ8me had been in trouble with the consumer watchdog. Back in March 2018, the company even paid a fine for suggesting in its ads that its products were endorsed by the ACCC.
“The misleading representations by Activ8me were blatantly wrong and misled hundreds of customers into signing up to internet services which were at a different price or speed than they expected,” ACCC deputy chair Delia Rickard said.
The court heard that 793 new customers signed up to Activ8me as a result of the misleading advertisements, and more than 81,000 direct mail ads were sent out.
The internet provider will send notifications to each affected customer and internally roll out a consumer law compliance program.
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