ACCC Announces Court Action Over Alleged Misleading Conduct from TPG

Thursday 6 December 2018 @ 11.17 a.m. | Legal Research | Trade & Commerce

The Australian Competition and Consumer Commission (“ACCC”) has announced in a Media Release that they have commenced proceedings in the Federal Court of Australia against TPG Internet Pty Ltd (“TPG”) , alleging that TPG have been "engaging in misleading conduct concerning a $20 “prepayment” made by consumers, and including unfair prepayment contract terms in some of their ADSL2+ and NBN plans."


The ACCC alleges that customers signing up to a TPG plan had to pay $20 for what TPG describe as a “prepayment” to cover costs that might be incurred but are not included in their plan, such as overseas phone calls. From March 2013 TPG was representing on its website that the prepayment of $20 could be used for excluded telecommunications services, before the consumer cancelled their plan.

The Allegations

The ACCC alleges that TPG’s representations to customers about the forfeiture and automatic “top-up” function are misleading and also alleges TPG’s standard contract term requiring forfeiture of the prepayment is unfair under the Australian Consumer Law (which is set out in Schedule 2 to the Competition and Consumer Act 2010 (Cth)). ACCC Deputy Chair, Delia Rickard added:

“We have and will continue to take action to hold telcos to account for failing to comply with the Australian Consumer Law.”

Comment from the ACCC

Ms Rickard was also quoted in the ACCC Media Release as saying:

“A reasonable consumer would expect that this $20 payment would be refunded if it was not used, but in fact it is non-refundable. It is unacceptable that TPG only disclose this forfeiture in fine print … since March 2013, the ACCC estimates that TPG is likely to have retained millions of dollars paid by consumers in prepayments that were forfeited.”

In addition, TPG’s terms mean that when a customer’s prepaid balance falls to $10 or lower, TPG automatically “tops-up” the prepayment by a direct debit from the customer to return their prepayment balance to $20. This means that customers can’t use at least $10 of the prepayment for telecommunications services when they cancel their plan, which is not disclosed. The ACCC alleges, however, that the payment acted as a non-refundable fee.

The ACCC provided an example of the prepayment, noting that if a customer never uses any telecommunication services that are not included in their plan, the customer then forfeits $20 when they cancel their plan.

Comment from TPG

TPG announced in a statement to ComputerWorld:

“TPG notes the ACCC’s media release today as to instituting proceedings in the Federal Court of Australia against TPG Internet Pty Ltd … TPG is yet to receive court sealed documents in respect of the announced proceedings. TPG firmly believes that its plan terms and advertising are neither misleading nor unfair and looks forward to dealing with these important issues through the court process.”

Previous ACCC Action against TPG

ComputerWorld also reports that in December 2017, the ACCC announced that that it had accepted a court-enforceable undertaking from TPG regarding the telco’s sale of NBN services.

The agreement with the ACCC related to Fibre to the Node (FTTN) and Fibre to the Building (FTTB) NBN services. The ACCC said that TPG, along with other major telcos, was found to have sold FTTN and FTTB services to consumers that had higher wholesale speeds than individual lines were capable of achieving.

In the current court action, the ACCC is seeking penalties and compensation for consumers.

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