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Thursday, 26 April 2012 14:17

"Tired" ACCC nabs TPG for misleading ads, again

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The ACCC has secured financial penalties from TPG for misleading advertisements with chairman Rod Sims saying he is tired of 'fine print' qualifications in advertisements, and threatening an increasingly aggressive approach to such practices.

TPG has paid penalties totalling $13,200 after receiving two infringement notices from the ACCC claiming that consumers who subscribed to a broadband bundle plan would receive 500 free minutes of VoIP calls. According to the ACCC the full 500 minutes were available only in limited circumstances.

(The payment of infringement notice penalties is not an admission of guilt. The ACCC can issue an infringement notice where it has reasonable grounds to believe there has been a breach. The recipient can choose to pay, or contest the notice.)

ACCC chairman, Rod Sims, said: "The advertising practice of fine-print qualification is one the ACCC is tired of correcting. The ACCC has repeatedly put the telecommunications industry on notice that it will not tolerate misleading advertising, and is concerned that consumers are regularly still not offered transparent and clear information about the price, terms and conditions for their services...The ACCC will take an increasingly aggressive approach to send the message that this kind of misleading advertising will not be tolerated."

The new Competition and Consumer Act greatly strengthens the ACCC's powers to act against companies that are misleading consumers and in a speech in February to the Australia-Israel Chamber of Commerce, Sims said the ACCC would not hesitate to use them.

"There have been profound changes in Australian Consumer laws recently that are not fully appreciated," he said. "These changes take Australia's consumer laws from a status of lagging the rest of the world to now providing among the strongest protections for consumers."

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He cited the case of one company (not a telco) that had paid a penalty of $1.25m for "advertising that contained fundamental information in the fine print of a catalogue which contradicted the advertisements key message."

This is the third time that TPG has fallen foul of the ACCC over its advertising, and this latest incident will to nothing to encourage the ACMA to accept the latest version of Communications Alliance's Telecommunications Consumer Protection code, which it is now assessing. The industry is nervously awaiting the ACMA's decision on whether to accept it or impose its own regulations.

Last November the Federal Court in Melbourne found advertisements for TPG's $29.99 Unlimited ADSL2+ campaign to be false and misleading because they represented that consumers could acquire the broadband service for $29.99 per month without acquiring any additional service or paying any additional monthly charge.

Earlier TPG advertisements were also found to be misleading because they did not disclose the obligation to pay additional up front charges including a $129.95 set up fee and a $20 home phone deposit. An ACCC spokesman told iTWire today that the court had yet to rule on what penalties should be imposed on TPG.

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