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Regulation Advertising Watchdog

Telstra, Optus and Vodafone warned over misleading ads by Australian watchdog


By Danielle Long, Acting APAC Editor

September 18, 2018 | 3 min read

The Australian Competition and Consumer Commission (ACCC) has warned telecom companies Telstra, Optus and Vodafone that they could face court action over misleading advertising.

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Australian consumer watchdog issues warning to telcos over misleading advertising claims / Vodafone

The consumer watchdog has put the companies “on notice” warning the telcos to ensure their advertising is “clear and transparent” or they could face court action from the regulator, including much higher penalties and proceedings against executives who approve misleading ads.

The warning follows an investigation by the ACCC into the use of the term ‘unlimited’ to advertise mobile data plans.

Between March and June 2018, Optus, Vodafone and Telstra advertised mobile data plans with a headline claim of ‘unlimited’ mobile data, but the services had speed caps imposed on particular uses or after a certain data threshold was reached.

The ACCC found the ads carried disclaimers that “were not sufficiently prominent or clear to explain to consumers the existence and impacts of the limitations”.

The ACCC’s investigation coincided with private litigation brought by Optus against Telstra in the Federal Court, which found that Telstra ads featuring the tagline “One word for Australia’s best mobile network. Unlimited”, were misleading or deceptive, and were in contravention of the Australian Consumer Law.

The court found Telstra falsely conveyed to consumers that its plans offered unlimited usage of its mobile network when its services were in fact, subject to use limitations and exclusions.

The ACCC said Telstra, Optus and Vodafone had all ceased using the ‘unlimited’ claim to advertise mobile data services.

Rod Sims, chair of ACCC, said, “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.”

“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."

“With much higher penalties now available for breaches of consumer law, I hope they will take their obligations more seriously. From now on consumer law penalties will seriously affect their bottom line, and we will not hesitate to seek the highest possible penalties,” said Sims.

Penalties for contraventions of the Australian Consumer Law have increased this month with companies facing fines of $10m, or three times the value of the benefit received, or where the benefit cannot be calculated, 10% of the annual turnover in the preceding 12 months.

Individuals now face fines of between $220,000 to $500,000 per breach of Australian Consumer Law.

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