Ep 45 of 2010
November 8, 2010
Banks and Telco's are a hot topic for discussion these days, both around the office water cooler and in the main stream media, and unfortunately the subject of the discussion is the same – ripping off consumers. The ACCC, Australia's consumer watchdog, has been tasked with trying to keep the bastards honest, but it's certainly becoming a hard task.
This past week saw Graeme Samuel's team have a deserved win over Optus, Australia's number two telco, over misleading consumers with it's super fast broadband offering. The advertisements offered large broadband quotas split into peak and off-peak quotas, accompanied by the words 'Think Bigger'.
The ACCC argued they were misleading because they did not adequately disclose that if a customer used all of their peak allowance, the service would be throttled back to 64kbps both for the peak usage and, more importantly, for the off-peak usage. The judgment stated that after the peak allowance was depleted, the consumer would not get the benefit of any of the remaining off-peak entitlement... at broadband speeds,.
Justice Nye Perram said that the plans "misrepresented the quantity" of broadband that Optus was offering to provide. He said customers were not being sold plans which gave them the nominated amount of broadband. They were given plans which had that amount as the maximum usage which could be obtained and, even then, only by careful use. He went on to say the plans in question did not have the quantity suggested for them. They were not 120GB, 150GB or 170GB plans at all.
Justice Perram also rejected arguments by Optus that the "misleading nature of the advertisement was reduced by the statements Optus makes, or seeks to have made on its behalf, at the point of sale." Optus had argued that advertisements only served to "put customers on inquiry" and that the full details of the plans were disclosed at the point-of-sale.
The ACCC had sought to have the throttle speed labelled as "sub-broadband" although Justice Perram found in favour of Optus on the issue of the impact of 64 Kbps throttle speeds, believing a reference to it in the footnote was "sufficient"
The icing on the cake for consumers was delivered late Friday when Justice Perram placed an injunction on Optus, preventing the telco from engaging in similar advertising campaigns for a period of three years. He also ordered Optus to pay all of the Australian Competition and Consumer Commission's (ACCC's) court costs, an outcome welcomed by ACCC chair Graeme Samuel.
In a statement by Graeme Samuel he said that the judgment reinforces the ACCC's long held position that this approach is not acceptable
commercial practice and does not reflect what the law requires, companies cannot rely on their call centres to correct advertisements that have misled and deceived people.
Seems like this round is over – Consumers 1, Optus 0. But how many more rounds does there have to be?
This week on Tech Talk Radio
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- iBooks are now available on Apples Australian App store
- Facebook admits apps shared user data
- Google V Facebook. Data sharing hostilities commence
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- Leena looks a video games and consoles to buy this Christmas for the up to 12's!