TPG Hammered By ACCC
The ACCC is filing federal court proceedings against TPG for misleading its consumers regarding a mandatory $20 ‘prepayment’ which it demands of its customers and unfair contract terms.
The ACCC is seeking penalties and compensation for consumers affected by the Telco’s policies.
New customers signing up to TPG have to pay a $20 “prepayment” fee which TPG claims cover costs that could be incurred when customers avail of services that are not included in their plan.
From March 2013, TPG stated on its website that this prepayment could be used for those services before the consumer cancelled their plan with the telco and have the prepayment returned to them.
In fact, the prepayment appears to operate as a non-refundable fee with TPG retaining at least $10 if a customer cancels their plan.
“A reasonable consumer would expect that this $20 payment would be refunded if it was not used, but in fact it is non-refundable. It is unacceptable that TPG only disclose this forfeiture in fine print,” ACCC Deputy Chair Delia Rickard said in a release.
Furthermore, when a TPG customer’s prepaid balance falls to $10 or lower, the prepayment is automatically topped up via direct debit to $20.
For instance, if a customer makes a $12 international call — which isn’t included in their plan — TPG deducts $12 from the prepayment which triggers the automatic top-up.
If that customer does not use any other service that is not included in their plan and then cancels their plan, they forfeit the $20 balance.
If a customer uses a service not included in their plan that costs less than $10 they forfeit the remaining balance if they cancel their plan.
If a customer doesn’t use any service not included in their plan, they forfeit the $20 prepayment when they cancel their plan.
“Since March 2013, the ACCC estimates that TPG is likely to have retained millions of dollars paid by consumers in prepayments that were forfeited,” Ms Rickard said.
The ACCC alleges that TPG’s policies are misleading and that TPG’s standard contract term requiring forfeiture of the prepayment is unfair under the Australian Consumer Law.
“We have and will continue to take action to hold telcos to account for failing to comply with the Australian Consumer Law,” Ms Rickard added.