The Federal Court has ordered TPG to pay $2 million in penalties for “false and misleading advertising” and failing to specify the minimum charge in relation to Unlimited ADSL2+ deals.
TPG’s $29.99 Unlimited ADSL2+ campaign was misleading because the ADSL2+ plan was only available when purchased with TPG home line rental at an additional cost of $30 per month.
Other ads also did not prominently specify the minimum charge and were misleading for not disclosing additional up front charges, the Court found.
This followed legal action taken by the Australian Competition and Consumer Commission and is not the first time the ISP has been slapped on the wrists for dodgy ads- it was similarly fined in 2010 and forked out $13,200 for misleading consumers on its ‘500 free VoIP Minutes’ ad in April.
“The conduct was seriously misleading and affected a diverse class of users and potential users of broadband services” said Justice Murphy of the Federal Court.
A sizeable penalty was “necessary to make it clear to TPG and to the market that the cost of risking a contravention cannot be regarded as merely an acceptable cost of business” he added.
TPG was also ordered to publish corrective notices, to maintain a trade practices compliance program for 3 years and to pay the ACCC’s costs.
The ISP understood “that there was a risk that its conduct might constitute misleading conduct” and “should have adopted a more cautious approach” the Justice added.
“This decision should send a strong warning to telecommunications and internet providers that they cannot continue to take risks in their advertising or they could end up in court and be exposed to substantial penalties,” ACCC Chairman Rod Sims said.
And Sims also sent a blunt warning to the telco industry that dodgy advertising wont be tolerated.
|The ACCC is committed to “taking a hard line to secure a culture of compliance” by telecos and improve marketing in the industry, Sims said, but the watchdog said it “remains concerned” about conduct in the sector in relation to the proper disclosure of key terms and conditions to consumers.
Recent actions by the ACCC included fining FOXTEL $42,600 in relation to its ‘Christmas Sale’ ads in March and Optus was also fined $3.61 m for deceptive conduct in relation to the speed of broadband plans.