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Telstra, Optus, TPG sued for allegedly lying about NBN speeds

(Source: Getty)
(Source: Getty)

Hundreds of thousands of Australian customers have been misled by internet providers Telstra, Optus and TPG, which have been caught accepting payments for NBN speeds they allegedly didn’t provide.

Australia’s consumer watchdog is hauling the country’s top three internet service providers to the Federal Court in separate lawsuits for allegedly making false or misleading representations about its advertised NBN speeds.

The Australian Competition and Consumer Commission (ACCC) is alleging that all three telco giants breached Australian Consumer Law in the way they promoted NBN plans promising speeds of 50 and 100 megabits per second (mbps).

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The companies told consumers they would test the maximum connection speeds; tell customers about their maximum speed if their connection line was underperforming; and offer compensation if the maximum speed was below that of their plan’s advertised speed, according to an ACCC statement released today.

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But the companies failed to do this, the ACCC is alleging.

“Telstra, Optus and TPG each promised to tell consumers within a specific or reasonable timeframe if the speed they were paying for could not be reached on their connection,” said ACCC chair Rod Sims.

“They also promised to offer them a cheaper plan with a refund if that was the case. Instead, we allege, they failed to do these things, and as a result many consumers paid more for their NBN plans than they needed to.”

Telstra and TPG made these false and misleading statements through its websites and emails between 1 April 2019 to 30 April 2020. Optus made such statements between 1 January 2019 and 31 December 2019.

Telstra told customers it would test the speed 21 days after connection, and promised customers that “If your nbn connection doesn’t allow you to properly benefit from the speed tier you’re on, we’ll provide you with a maximum line speed, once it’s available, along with alternative options”.

Optus similarly told customers it would check speeds, and also promised “options will be provided if the actual speed you achieve is lower than what’s included in your plan or speed pack”.

Meanwhile, TPG told customers they would advise customers via email of their connection speed “around three weeks after activation”. Customers would subsequently “have the option to move to a lower speed plan (if available) or to change providers without contract break fees”.

MELBOURNE, AUSTRALIA - JUNE 14:  A Telstra logos are seen outside the Telstra Melbourne headquarters on June 14, 2017 in Melbourne, Australia. Telecommunications company Telstra is expected to cut up to 1400 jobs in an effort to reduce costs, as the company prepares to deal with a $3 billion earning gap expected because of the national broadband network.  (Photo by Michael Dodge/Getty Images)
Telstra has been slashing jobs in recent years in an effort to reduce costs. (Photo by Michael Dodge/Getty Images) (Michael Dodge via Getty Images)

But all three providers didn’t have systems in place to do any of this: not implementing speed checks, notifications, or remedies they promised, the ACCC stated.

ACCC’s investigation was prompted because Telstra self-reported, but also because ACCC’s Measuring Broadband Australia reports found customers weren’t getting speeds they were paying for.

Customers often look at internet speed when deciding what NBN plan to pay for, but it’s “complex, confusing and time-consuming” for customers to understand features of NBN plans and to check maximum speeds themselves, Sims said.

“It is important that internet providers like Telstra, Optus and TPG give their customers accurate information so they can make an informed choice about the service that best suits their needs and budget.”

The internet providers’ actions were “even more concerning” because they were “well aware” of the issues, Sims added, and have previously faced off with the ACCC over similar issues.

“We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC.”

All three companies have promised to compensate customers, even before the court case is finalised, Sims added.

Telstra, Optus and TPG are getting in touch with affected customers to let them know they’re eligible for a refund, be offered alternative plans, or the option to ditch their contract without paying a penalty.

Customers can also get in touch with the companies directly for further information.

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