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Thursday, 03 June 2010 23:41

ACCC takes Optus to court over 'unlimited' claims in mobile advertising

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The ACCC has instituted legal proceedings against Optus over its use of the word 'unlimited' in relation to its prepaid mobile services. This comes as no surprise to iTWire.

The ACCC has instituted proceedings in the Federal Court in Melbourne against Optus alleging that Optus contravened the Trade Practices Act in television, radio and print advertisements that promoted 'unlimited' calls on its $70 prepaid Turbo Max plan.

I suggested back in March that Optus was sailing very close to the wind in the way it promoted the Turbo Max plan.

The ACCC says these advertisements were misleading because the offer is subject to a number of limitations and restrictions. The ACCC is seeking declarations that Optus contravened the Act. It is also seeking injunctions and costs.

The proceedings have been filed in the Federal Court's Fast Track List and there will be a scheduling conference before Justice Middleton in Melbourne on 25 June.

In my original comment piece, I quoted Optus describing the plans as 'virtually unlimited' and suggested this statement was as nonsensical as describing a woman as being '0 percent pregnant' and quite unjustified given the number of qualifications to 'unlimited'; which seems to be exactly the thing that has upset the ACCC.

Going back to that article, what surprises me is the comments that it engendered. I was accused of "getting facts wrong and [trying] to muddy waters that don't need muddying."

This objector went on to say: "You quote a statement 'To avoid misleading consumers, any qualifications of an offer of 'unlimited' calls or text must be prominently stated and not so significant that they negate the headline message.' If you take note of the Optus offer, everywhere I have seen this, it clearly states the 3000 mins or SMS limit under the Unlimited statement'¦If you are a heavy user, unlimited means no restrictions to your calling habits. 3000 mins is 1.45 hours of talking every day for 30 days."

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That statement I quoted came from ACCC chairman Graeme Samuel, and I did acknowledge that 3000 mins per month was more than most people would likely use, but even so I questioned whether it was within the ACCC guidelines to describe this as unlimited.

Then there was another post from Scott Drummond, online community manager at Optus who made the point that "throughout the press release for the new Turbo Max pre-paid plans it is made very clear that the offer is 'virtually' unlimited and the qualifications of the offer are prominently stated on the offer homepage."

He missed my point completely. I never suggested that the qualifications were not prominent, or that Optus was being deliberately deceptive. I simply doubted that, given the extent of qualifications in the Turbo Max plan, the ACCC would be happy with Optus' use of the term 'unlimited'

In support of this view, I said: "Samuel gave a stern warning to the industry as a whole last year in his address to the Atug annual conference [and] the ACCC announced in September 2009 that Australia's three largest telecoms operators had given an enforceable undertaking committing them to 'the basic principle of truth in advertising.' This included not using terms such as 'free', 'unlimited', 'no exceptions', 'no exclusions' or 'no catches' when this is not the case."

It seems I was right.



 


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