Finance Consumer ‘Make the switch, before it’s too late’: ACCC takes Optus to court over claims it misled consumers

‘Make the switch, before it’s too late’: ACCC takes Optus to court over claims it misled consumers

After being slapped with a $10 million fine in February, Optus is again facing allegations of misleading consumers. Photo: TND
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Australia’s consumer watchdog is taking Optus to court for allegedly misleading consumers about the need to switch their internet services, threatening disconnection.

In a statement on Thursday afternoon the Australian Competition and Consumer Commission (ACCC) alleged the nation’s second-largest telco provider had made “false or misleading” claims in an email offering its NBN services to 140,000 customers on May 24 last year.

The email told customers that “their broadband service would be disconnected very soon” and encouraged them to “make the switch, before it’s too late”, the ACCC said.

“Optus understood the recipients of the email were already being supplied with NBN-based services by a company other than Optus, and Optus did not have any reasonable basis for asserting they would be disconnected.”

Optus a serial offender

The Singaporean-owned telco has been a serial offender when it comes to misleading consumers, and was slapped with a $10 million fine in February for misleading customers over digital purchases.

On May 22 last year – just two days before the NBN email currently under scrutiny was sent out – the Federal Court ordered the firm to pay $1.5 million for making misleading representations to customers about their transition from Optus’ HFC network to the NBN.

“The ACCC has had to take action about Optus’ advertising on several previous occasions, and it is concerning that we are again having to take them to court for alleged misleading statements about this issue,” ACCC commissioner Sarah Court said.

Moving to the NBN is “an important decision for consumers” and “can also be a confusing process”, she said.

Internet users have 18 months to switch over to the NBN once it has arrived in their area, at which time pre-NBN internet services are disconnected.

“A retail internet service provider like Optus may inform consumers about the possibility of disconnection towards the end of the 18-month period,” the ACCC said.

“However, once NBN services are connected, consumers are no longer at risk of disconnection as a result of the rollout of the NBN.”

In a statement on Thursday afternoon, Optus vice president of regulatory and public affairs Andrew Sheridan said that the firm “acknowledges the ACCC’s action today and its mistake”.

“Optus has apologised to customers who received the mistaken communication and offered a costless exit for those who took out the offer,” Mr Sheridan said.

NBN rollout continues

The national broadband network is scheduled to be completed in 2020, but has been plagued by delays, connection issues and is running billions of dollars over budget.

Australia’s leading telecommunications academics have slammed the network, describing it as “an obsolete network”, and a “national infrastructure disaster”.

In May, a University of Sydney found that between 40 and 60 per cent of homes in Australia’s three biggest cities would be connected to the network by HFC, the oldest and most controversial of the options available under the NBN’s mixed-technology model.

Residents can check the type of service they will have access to, and when it will arrive in their area via the NBN website.

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