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

Why defining brand strategy is vital to capitalising on quick wins

Big brands were once protected from small brands by high barriers to entry. Big brands had the resources to employ big agencies, to crack big ideas and to invest in big campaigns. They had the luxury of time to debate strategies and work on long-term innovation pipelines. Retailers used to partner with big brands.

Troy McKinnna

Co-founder, Agents of Spring, Calm & Stormy

3 ways to leverage the talents of your team to avoid disruption

​According to the World Economic Forum in its most recent The Future of Jobs report, the most important skills for the future are not technical, task-oriented skills, but higher-order skills such as creativity, social influence, active learning, and analytical thinking.

Gihan Perera

Futurist, leadership consultant

CMOs, it’s time to stop squandering customer attention

Businesses continue to highly value the attention they buy through paid media, yet at the same time, many continue to disregard and under-value opportunities to connect with customers using their owned media.

Well written Vanessa!! Agreed with your view that human experience is marketing's next frontier. Those businesses who are focused on the ...

Clyde Griffith

Forget customer experience, human experience is marketing's next frontier

Read more

Great tips for tops skills need to develop and stay competitive

Nick

The top skills needed to stay competitive in a rapidly changing workforce

Read more

The popularity of loyalty programs is diminishing, though I'd say it is because customers are savvy enough to recognise when a loyalty pr...

Heather

It’s time for marketers to rethink their approach to ‘loyalty’

Read more

Thanks Nadia for sharing this blog. It has really useful and amazing information about Salesforce Commerce Cloud and digital engagement w...

Holly Smith

Adidas taps data and technology smarts to build personalised digital engagement with consumers

Read more

clearly someone who's jealous and only comments from the safety of being behind their keyboard

Peter Sibson

The purpose of purpose - Brand science - CMO Australia

Read more

Latest Podcast

More podcasts

Sign in