The Federal Court has ordered Telstra to pay an $18 million penalty after moving thousands of Belong customers to lower-speed plans without informing them.
In October and November 2020, Telstra migrated 8,897 customers on its Belong brand NBN plans from their current plan which provided a maximum upload speed of 40 Mbps to a service that provided a maximum upload speed of only 20 Mbps. The download speed was unchanged at 100Mbps.
Telstra did not tell customers of the change in maximum upload speed in their service at the time of the change.
“The $18 million penalty sends a strong message to all businesses that they cannot mislead consumers by making changes to key aspects of a service without informing customers of those changes” ACCC Commissioner Anna Brakey said.
In addition to the penalty, all affected customers have, or will be, remediated by Telstra with a credit or payment of $15 for each month the customer had been on the lower upload speed plan.
The total remediation that Telstra will pay to affected customers exceeds $2.3 million.
“Telstra’s failure to inform customers that their broadband service had been changed denied them the opportunity to decide whether the changed service was suitable for their needs,” Ms Brakey said.
Read also: Study reveals trust gap in Australia’s digital government experience
“Misleading pricing and claims in relation to essential services, with a particular focus on telecommunications, is one of ACCC’s current enforcement priorities.”
Telstra made payments to some affected customers prior to the ACCC commencing proceedings. The remaining payments to customers are being made in accordance with a court-enforceable undertaking Telstra has given to the ACCC. Those customers will be contacted by Belong via email.
The Court also ordered Telstra to pay a contribution to the ACCC’s costs. The Court will publish its reasons for judgment at a later date.
Telstra co-operated with the ACCC by making joint submissions to the Court about orders, including in relation to penalties.
Background
- Belong was launched by Telstra in 2013 as a low-cost mobile and internet service provider, operating semi-independently in a number of areas, including products, marketing, service, billing and parts of IT.
- Upload speed refers to the speed an individual’s internet connection can allow data to be sent from their devices to the internet e.g. sending emails, streaming video calls and conferences.
- In May 2020, NBN Co launched a series of new wholesale consumer speed tiers, including a new 100/20Mbps wholesale speed tier, which provided a maximum download speed of 100mbps and a maximum upload speed of 20mbps. This speed tier costs retail service providers $7 less per month than the 100/40Mbps plan on a wholesale level.
- The ACCC commenced its court action against Telstra on 6 December 2022, and the Federal Court made findings against Telstra on 21 February 2025.
