Internet provider Dodo will refund about 16,000 customers after imposing excess data charges for modest streaming usage.

Dodo has made a court-enforceable undertaking with the ACCC to refund up to $360,000 after admitting its plans advertised as “perfect for streaming” were likely to be in breach of consumer law.

Dodo said its plans were “perfect for streaming” in advertisements for entry-level broadband plans, including those with maximum speeds of 12 megabits per second.

“We were concerned that Dodo customers on these plans could not reliably stream high quality video, particularly when others in the household were using the internet at the same time,” ACCC chair Rod Sims said.

“At 12 mbps, Dodo's customers could not stream ultra HD video at all.”

Streaming services require speeds of 15 mbps for ultra HD.

Some “perfect for streaming” plans had a monthly data allowance of just 10 gigabytes, which the ACCC said would only cover a “modest” amount of streaming.

“[That] may get you a couple of movies a month, but after that you got charged excess charges,” Mr Sims said.

“What's outrageous about that is you're getting charged extra for using the service as advertised. We think that's simply unacceptable.

“People who are buying this plan would clearly want to watch more than a couple of movies a month, particularly if they're signed up to Netflix and paying the fees that they have to pay.”

Dodo said excess data charges averaged just $23 per customer.

“Dodo will offer credits and refunds of the excess usage charges, and where applicable waive any exit fees to current customers,” it said.