Telcos have been ordered to pay a total of $33.5 million for misleading statements about NBN maximum speeds. 

Australia’s three largest internet service providers, Telstra Corporation Ltd (Telstra), Optus Internet Pty Limited (Optus), and TPG Internet Pty Ltd (TPG), have been ordered by the Federal Court to pay the penalties after they each admitted making false or misleading representations to consumers when promoting certain NBN internet plans, in proceedings brought by the ACCC.

Telstra was ordered to pay $15 million, Optus was ordered to pay $13.5 million, and TPG ordered to pay $5 million in penalties for breaching the Australian Consumer Law (ACL) by making false or misleading statements in relation to their 50Mbps or 100Mbps fibre to the node (FTTN) plans.

By making statements on their websites, in emails to consumers or in telesales, Telstra, Optus and TPG each promised to tell consumers within a reasonable timeframe if the speeds they were paying for could not be reached on their NBN connections. 

They each also said they would offer these consumers options, including to move to a cheaper plan with a refund, if they could not achieve the maximum speed on their plans.

Telstra, Optus, and TPG each admitted that their statements were false or misleading, in breach of the ACL, because they did not have adequate systems, processes and policies in place to ensure they would do what they said they would.

The false or misleading statements made by the three providers affected nearly 120,000 consumers in total and were made for at least 12 months in 2019 and/or 2020.

“Fast and reliable internet is a necessity for Australian households, and consumers need accurate information when choosing the best internet plan to meet their needs,” ACCC Commissioner Liza Carver said. 

“These significant penalties reflect the seriousness of the breaches of consumer laws by these large and sophisticated businesses that should be better informed about their obligations towards their customers, particularly given the promises they made to their customers and in undertakings previously provided to the ACCC regarding speed claims for their NBN plans in 2017.”

Telstra, Optus and TPG also each admitted that by failing to notify consumers whose maximum attainable speeds were lower than the speed of their purchased plan, they had falsely represented to those consumers that their NBN connections were capable of attaining the higher speeds.

“Some customers may have paid for a 50 or 100 Mbps plan believing their NBN connection could support the higher download speeds, even though they would have been better off paying for a lower speed plan,” Ms Carver said.

“It is illegal for businesses to make false or misleading representations to consumers about the performance characteristics, nature, standard or quality of products and services.”

Telstra, Optus, and TPG have each implemented remediation programs and have already contacted impacted customers to provide refunds.