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TPG hit with AUD$2m fine

ACCC takes action on tricky telco ads

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The Australian Competition and Consumer Commission has again taken a local telco to task for dodgy advertising practices.

This time the offender is TPG Internet, which has has been ordered by the Federal Court to hand over AUD$2 million in civil pecuniary penalties for false and misleading national advertising campaign.

The ISP was found to have failed to prominently specify the minimum charge in the campaign and therefore was held to have misled customers.

TPG has also been ordered to publish corrective notices, maintain a trade practices compliance program for three years and to pay the ACCC’s costs. The Court also imposed injunctions restraining TPG from engaging in similar conduct in future.

Justice Murphy said the sizeable penalty was “necessary to make it clear to TPG and to the market that the cost of risking a contravention cannot be regarded as merely an acceptable cost of business”.

These orders follow the Federal Court finding that TPG’s $29.99 Unlimited ADSL2+ campaign was false and misleading as the plan was only available when purchased with home line rental from TPG. Earlier TPG advertisements were also found to have failed to specify the minimum charge and were misleading for not disclosing additional up front charges.

“This decision should send a strong warning to telecommunications and internet providers that they cannot continue to take risks in their advertising or they could end up in court and be exposed to substantial penalties,” ACCC Chairman Rod Sims said.

TPG is no stranger to the ACCC’s watch as in March 2012 it was hit with fines of $13,200 in relation to advertising of a ‘free 500 VoIP minutes’ offer.

“The ACCC is committed to taking a hard line to secure a culture of compliance by telecommunications providers and improve marketing in the telecommunications industry,” Sims warned.

In other recent telco misdemeanours, Dodo was fined in January 2011 for $26,400 in relation to pricing of its ‘unlimited’ broadband plans, in May Optus was fined $178,200 in relation to its ‘Max Cap’ plan advertising and in March the Full Federal Court also imposed a pecuniary penalty of $3.61 million on appeal, finding that Optus engaged in misleading and deceptive conduct in relation to the speed of broadband plans. ®

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