ACCC warns telco marketers over false advertising

Chair of the Australian consumer watchdog threatens bigger fines and court action against telcos making misleading claims about services

The chairman of Australia’s consumer watchdog has come out swinging against marketers operating in the country’s telecoms sector, threatening court action against those who knowingly approve misleading advertisements.

Australian Competition and Consumer Commission chair, Rod Sims, said telcos are on notice for false and misleading advertising, and has warned them to ensure advertising is both clear and transparent or risk facing court action as well as higher penalties if they don’t.

As of 1 September, ACCC has been given the power to impose higher penalties against those breaches the Australian Consumer Law to the greater of $10 million, three times the value of the benefit received, or 10 per cent of annual turnover in the preceding 12 months. Individual penalties also rose from $220,000 to $500,000 per breach .

The move comes after the ACCC launched investigations earlier this year into use of the term ‘unlimited’ in mobile data plans advertised by Optus, Vodafone and Telstra. It came at the same time as Optus lodged private litigation against Telstra in the Federal Court for referring to its mobile data plans as offering ‘unlimited’, alleging such plans were not in fact unlimited at all.  

The ACCC noted all three major players - Optus, Vodafone and Telstra – have advertised mobile data plans as ‘unlimited’ yet each has imposed certain restrictions on services in cases where a data or speed threshold is reached. Optus, for example, imposes a 1.5Mbps speed restriction on tethering, streaming and downloads for users on its ‘unlimited’ plan, while heavy data users could also be deprioritised during congestion across the network.

Vodafone, meanwhile, provides an initial data allowance at usual speeds under its ‘unlimited’ plan, yet also caps speeds at 1.5Mbps once this threshold is reached, while Telstra offers 40GB at usual speeds under its ‘unlimited’ offering but slows services to 1.5Mbps and even further during busy periods.

According to the ACCC, each headline claim in most cases qualified with disclaimers but these were not sufficiently prominent or clear for consumers to understand either their existence or impact.

In addition, the Federal Court has found Telstra’s tagline, ‘One word for Australia’s best mobile network. Unlimited’ was misleading and deceptive and falsely conveyed to consumers that the telco giant provided plans that gave consumers unlimited usage across the network when it in fact was always tied to limitations or exclusions.

Since the Federal Court findings and the ACCC’s investigations, all three telcos have ceased using the term ‘unlimited’ in their mobile data services advertising.

“Telecommunications companies should be wary of using absolute claims like ‘unlimited’ where that does not give a true picture to consumers of what is being offered,” Sims stated.

“We have taken a range of actions against telecommunication companies for misleading consumers. It is about time they showed more respect for their customers and the Australian Consumer Law.” 

 

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu  

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Is customer segmentation dead?

Ginni Rometty, the CEO of IBM, announced the death of customer segmentation five years ago saying, "The shift is to go from the segment to the individual. She might have been a bit premature for most marketers, but if customer segmentation isn't dead yet, it's definitely on life support.

Richard Taylor

Senior digital strategist, Spinach

How people buy brands

Andrew Ehrenberg was a giant in the field of marketing science. He believed scientific methods could reveal law-like patterns of how people buy. In this post, I summarise one of Ehrenberg’s most important discoveries and its implications on how people buy brands.

Kyle Ross

Strategist, TRP

Is artificial intelligence riddled with bias?

The purpose of Artificial Intelligence (AI) has always been to replace the menial and repetitive tasks we do each day in every sector, so that we can concentrate on doing what we do best. Saving time and money has certainly been a decent outcome as AI infiltrates the business landscape, however, now we are starting to see problems that cause major issues in practice.

Katja Forbes

Founder and chief, sfyte

At the deeper levels of artificial intelligence, computing machines make all kinds of correlations among whatever data is available to th...

Fraction Tech

Is artificial intelligence riddled with bias? - Customer Design - CMO Australia

Read more

https://myiplookup.com/ - find your ip address and location information in our main page. Also there are many ip tools you can use : IP L...

savefrom

iSelect outlines new approach to arrest ineffective marketing as its reports full-year results

Read more

https://myiplookup.com/ - this website will allow you to View Alexa Ranking and graph Check http headers of a website, tool to compare te...

savefrom

The Star's first CMO creates all-new marketing team

Read more

Good tips to follow. Thank you!

Anna Travis

5 things every business can do to drive brand loyalty

Read more

Thank you! That was useful to know.

Belia Adam

Why your best social marketing brand tool could be hiding in plain sight

Read more

Latest Podcast

More podcasts

Sign in