Telstra fined $18m for misleading Belong customers over broadband speed claims
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The news: Telstra has been ordered by the Federal Court to pay a penalty of $18 million for breaching Australian Consumer Law after it moved almost 9,000 Belong customers to a lower speed plan without telling them.
The numbers: 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 megabits per second (mbps) to a service that provided a maximum upload speed of only 20 mbps. The download speed was unchanged at 100 mbps.
Telstra did not tell customers of the change in maximum upload speed in their service at the time of the change.
In addition to the penalty, all affected customers are to 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.
The context: Telstra made payments to some affected customers prior to the Australian Competition and Consumer Commission (ACCC) commencing proceedings. The remaining payments to customers are being made in accordance with a court-enforceable undertaking Telstra has given to the ACCC.
The court also ordered Telstra to pay a contribution to the ACCC’s costs.
What they said: “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,” said ACCC commissioner Anna Brakey.
“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.”
The source: ACCC
