Major telcos promise to tell the truth when advertising

Stuart Corner
Monday, 14 September 2009 12:11

IT Industry - Strategy

Australia's three largest telecoms operators (and their subsidiary MVNOs) have given a court enforceable undertaking to the ACCC that, according to the ACCC, commits them to "the basic principle of truth in advertising."

According to the ACCC, in the undertaking - signed by Telstra, Vodafone Hutchison (operating under the Vodafone, 3 and Crazy John's brands) and Optus (also on behalf of Virgin Mobile) all the operators have commited to "review and improve their advertising practices so that consumers are better informed about the telecommunications products and services they offer."

ACCC Chairman Graeme Samuel, said: "The broader telecommunications industry has for some time walked a fine line between compliant and non-compliant advertising...Having the three major carriers on board is a critical step, and the management of the major telecommunications companies should be applauded for taking a stand."

He added: "The ACCC recognises there is more to do...[and] will now contact the next tier of operators who will be encouraged to adhere to the principles set out in the undertaking. When taken together with the three major carriers, this would then account for almost 90 percent of the market for telecommunications goods and services in Australia...This undertaking is part of a sustained effort launched by the ACCC earlier this year to clean up telecommunications advertising."

The ACCC says it has identified the 12 most prevalent types of potentially misleading conduct made in telecommunications, and the three industry leaders have undertaken that their advertising will not make these claims "in circumstances where they are likely to be misleading to consumers."

Some of the poor practices the agreement covers are:
- Use of terms such as 'free', 'unlimited', 'no exceptions', 'no exclusions' or 'no catches' when this is not the case
- Headline price offers in the form of "price per minute" for mobile phones and phone cards when there are other fees/charges which are not clearly disclosed;
- Headline claims relating to price, data allowances, total time allowances, speeds and network coverage where the claims cannot generally be sustained for all consumers.