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Optus busted for dodgy broadband ads

ACCC fines telco A$5.26m for 'misleading' unlimited claims

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Optus has been ordered to pay A$5.26m for misleading advertising in the largest civil penalty dished out by the Australian Competition and Consumer Commission.

The penalty applies to Optus' range of "Think Bigger" and "Supersonic" broadband internet plans, which were launched in April 2010 and August 2010 respectively across a range of media.

The advertising campaigns claimed that for a monthly payment, a consumer would receive a headline data allowance of broadband which was then split into peak (midday to midnight) and off-peak (midnight to midday) data allowances.

The ACCC alleged that Optus had not sufficiently disclosed that the service would be limited to 64kbps at all times once a consumer exceeded their peak data allowance. As a consequence any unused off-peak data would no longer be available at a broadband speed.

ACCC Chairman Graeme Samuel said, "the court is punishing a company that disregarded the law and misled consumers". He added that the decision and size of the penalty sent a "clear message that misleading consumers is not a legitimate business strategy. Optus is not a small business, but a large company that engaged in misleading and tricky conduct."

Samuel also warned the entire telecommunications industry to make note of the outcome.

Optus has had a bad run with advertising claims recently. In February the Federal Court found that advertisements published by Optus that promoted its broadband plans as "unlimited" were misleading and deceptive. In May this year, the ACCC issued 27 infringement notices on Optus totalling $178,200 – which the company has now paid – for alleged misrepresentations concerning its "Max Cap" advertisements for pre-paid mobile phone services.

In January this year, Optus provided the ACCC with court-enforceable undertakings in relation to alleged misrepresentations to consumers about their statutory rights in relation to faulty mobile phones. ®

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