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

Latest Videos

More Videos

Well, the conversion can be increased by just using marketing, but in general if you are considering an example with Magento, then it is ...

Bob

How Remedy is using digital marketing and commerce to drive conversion

Read more

yo nice article

Bob

6 Ways to ramp up Social Media to Your Web Design

Read more

Thanks for sharing with us. I just loved your way of presentation. I enjoyed reading this .Thanks for sharing and keep writing. It is goo...

Nisha

Cancer Council: Finding the physical-virtual engagement balance post-COVID

Read more

yes AI should be a course so many People Use AI https://g-techsolutions.com...

M Abdullah Khan

Is AI on course to take over human creativity? - Modern creative - CMO Australia

Read more

Extremely informative. One should definitely go through the blog in order to know different aspects of the top retail technology.

Pooja Gupta

Donut King takes in-store marketing to the next digital level

Read more

Blog Posts

Brand storytelling lessons from Singapore’s iconic Fullerton hotel

In early 2020, I had the pleasure of staying at the newly opened Fullerton Hotel in Sydney. It was on this trip I first became aware of the Fullerton’s commitment to brand storytelling.

Gabrielle Dolan

Business storytelling leader

You’re doing it wrong: Emotion doesn’t mean emotional

If you’ve been around advertising long enough, you’ve probably seen (or written) a slide which says: “They won’t remember what you say, they’ll remember how you made them feel.” But it’s wrong. Our understanding of how emotion is used in advertising has been ill informed and poorly applied.

Zac Martin

Senior planner, Ogilvy Melbourne

Why does brand execution often kill creativity?

The launch of a new brand, or indeed a rebrand, is a transformation to be greeted with fanfare. So why is it that once the brand has launched, the brand execution phase can also be the moment at which you kill its creativity?

Rich Curtis

CEO, FutureBrand A/NZ

Sign in