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The Australian Competition and Consumer Commission (ACCC) has sued telecommunications giant Telstra, alleging that it misled customers about the actual download speeds they would experience.
The consumer watchdog has filed suit in the Federal Court against Telstra for its promotion of its budget internet brand, Belong.
The commission claims that nearly 9,000 Belong subscribers were unexpectedly downgraded from an NBN plan with a maximum upload speed of 40Mbps to one with a speed of 20Mbps
In October and November of 2020, clients who had signed up for the plan years before made the switch.
ACCC commissioner Liza Carver said although NBN’s monthly fee to Telstra was $7 less, the company did not inform users or reduce the price of service to reflect the decrease in upload speeds.
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Carver said, “We allege 8897 consumers who signed up to a Belong NBN plan between May 2017 and October 2020 were affected by this change and deprived of the opportunity to make an informed decision about their internet service.”
“We allege that more than 6300 Belong customers have still not been informed by Telstra that their plan has changed to a lower maximum upload speed, and that Telstra continues to represent to them that the Belong broadband service supplied to them has not been altered,” the commissioner added.
In March and April of last year, Telstra notified roughly 2500 of the impacted customers and credited their accounts with $90.
Yet Carver insisted that additional action on the part of Telstra was required to fix the problem.
“In these circumstances, we are seeking a court order requiring Telstra to pay compensation to consumers who, we allege, did not get the service they signed up for,” Carver said.
“We expect a company of Telstra’s size and experience to take their obligations under the Australian consumer law very seriously, including those prohibiting misleading or deceptive conduct and false or misleading representation.”
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According to a Telstra spokeswoman, the company disputed the watchdog’s stance.
The spokeswoman said, “We don’t agree with the ACCC’s views on this issue and look forward to resolving it.
“When our communications with some of our customers have fallen short, we’ve let them know and made things right.”
ACCC said it was seeking declarations, penalties, consumer redress, as well as costs and other orders from Telstra.
Last month, the Federal Court ordered the telecom to pay $15 million for deceiving customers when promoting NBN broadband services.
Jaw de Guzman is the content producer for Comms Room, a knowledge platform and website aimed at assisting the communications industry and its professionals.
