Telstra, Optus and TPG sued over broken NBN promises

ACCC Chair Rod Sims says Australia's largest telcos have broken promises to clean up their acts.

ACCC Chair Rod Sims says Australia's largest telcos have broken promises to clean up their acts. Photo: TND

Telstra, Optus and TPG kept overcharging for NBN plans after they were exposed for over-egging internet speeds, despite promising refunds for Australians affected by the dodgy deals, a new court case has alleged.

The Australian Competition and Consumer Commission (ACCC) on Monday accused the telcos of breaking promises to clean up their acts after it was found they sold unachievable NBN internet speeds in 2017.

The ACCC lodged three separate federal court cases over the conduct, alleging false and misleading conduct under Australian Consumer Law.

The allegations could result in multimillion-dollar penalties for the telcos.

ACCC chair Rod Sims said the companies were aware they had ripped off customers, but still hadn’t “taken seriously” their obligations to refund them.

“Telstra, Optus and TPG each promised to tell consumers within a specific or reasonable timeframe if the speed they were paying for could not be reached on their connection,” Mr Sims said in a statement.

“What makes this behaviour even more concerning is that Telstra, Optus and TPG were well aware of these issues and had earlier given undertakings to the ACCC to provide remedies to consumers who purchased NBN plans with speeds that couldn’t be delivered.”

The telcos were caught selling NBN speeds to Fibre to the Node (FTTN) customers that were much faster than could realistically be achieved in 2017.

At the time, it was found Telstra sold to 9606 NBN customers plans offering 100/40 megabytes per second (Mbps), even though the company could not even achieve connections providing half that speed.

Optus and TPG sold similarly unachievable NBN plans.

After the scandal emerged, Telstra promised customers it would test their line speeds within 21 days of connecting, while TPG pledged to tell customers their actual speeds about three weeks after they activated.

Optus merely told customers it would check their actual speeds and tell them if it was slower than advertised.

But the ACCC will allege each telco had inadequate systems in place to actually undertake this testing and communicate speeds to customers.

The latest case comes after the Australian Media and Communications Authority (ACMA) fined Telstra $25 million last month for failing to properly notify customers about its dodgy NBN deals.

The telcos have told the ACCC they will recommit to refunding people, communicating their actual speeds to them and offering cheaper deals.

Australian Communications Consumer Action Network deputy Andrew Williams welcomed the ACCC prosecution in a statement on Monday.

“It’s very disappointing to see that three of the nation’s biggest telcos have allegedly mislead consumers,” he said.

“Consumers deserve to get what they pay for from their telecommunications provider.”

Telcos blame NBN

In an extraordinary broadside launched at NBN Co on Monday, Telstra and TPG blamed the government-owned wholesaler for the delays in telling customers about their internet speeds.

“We apologise and will be making things right with impacted TPG Internet customers,” a spokesperson for TPG, which is owned by Vodafone, said in a statement.

“There were two contributing issues, including failure by NBN Co to provide timely and accurate speed information to TPG Internet.”

A spokesperson for Telstra said it self-notified the issues to the ACCC.

“As we’ve seen today with Optus and TPG, this issue is not isolated to us and is happening more broadly across the industry because of a complicated process,” a spokesperson for Telstra said in a statement.

“Transparency around speeds is a complex topic, and one which NBN Co have left entirely to the RSPs [retail service providers], without providing the tools and information customers need so they know what to expect before they connect.

“At the point of moving across to the nbn for the first time, the speed a customer can get at their premises is unknown – by both the NBN Co and the RSP.”

Optus did not directly criticise NBN Co and promised to refund people.

“The speed that is achievable on some NBN connections can be impacted by issues including the length and quality of the copper line that connects a customer to the NBN,” an Optus spokesperson said.

“Unfortunately, not all NBN connections can deliver the same speeds.”

The ACCC is currently examining the prices retailers are paying for NBN internet and the service standards the taxpayer-owned firm delivers.

NBN Co has been contacted for comment.

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