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

3 marketing mistakes to overcome when courting prospective customers

Marketing that urges respondents to ‘buy now’ is a little like asking someone to marry you on your first date. At any time, only 3 per cent of the market is looking for what you’re selling, so the chances of your date randomly being ‘The One’ is pretty slim.

Sabri Suby

Founder, King Kong

Why are we dubious about deep learning?

The prospect of deep learning gives those of us in the industry something to get really excited about, and something to be nervous about, at the same time.

Katja Forbes

Founder and chief, sfyte

Why you can’t afford to fail at CX in 2019

In 1976 Apple launched. The business would go on to change the game, setting the bar for customer experience (CX). Seamless customer experience and intuitive designs gave customers exactly what they wanted, making other service experiences pale in comparison.

Damian Kernahan

Founder and CEO, Proto Partners

Red Agency YouGov Galaxy Report, February 2019 Predictors Study. https://redagency.com.au/re...

Vanessa Skye Mitchell

DNA-based marketing: The next big thing?

Read more

RIP holden

Max Polding

Marketing professor: For Holden, brand nostalgia ain’t what it used to be

Read more

Where does the claim that 2 million Australians have tested come from ? Anecdotal information suggests that this is way off the mark.

David Andersen

DNA-based marketing: The next big thing?

Read more

Thank you for the info , being part of a digital marketing agency in kerala , this proved handy and get to know with upcoming trends. htt...

Dotz Web Technologies

Predictions: 9 digital marketing trends for 2019

Read more

So who then is correct? The Research or The skilled Digital people.

Anene

Report reveals Australia faces digital skills shortage

Read more

Latest Podcast

More podcasts

Sign in