ACCC says Telstra, Optus and TPG misled customers over NBN speeds

The Australian Competition and Consumer Commission (ACCC) is initiating Federal Court proceedings against Australia’s three biggest internet providers, after alleging each company misled customers over NBN speeds.

According to the ACCC, Telstra, Optus and TPG each made ‘false or misleading representations’ in advertising and promoting their respective NBN 50 and NBN 100 plans to customers, including wrongly accepting payments from customers who were unable to achieve promised connection speeds. The ACCC alleges that each telco breached Australian Consumer Law, and is seeking to impose penalties including declarations, injunctions, monetary reparations, and the implementation of compliance programs to prevent future infractions.

ACCC: ‘disappointed’ in NBN breaches

The ACCC’s complaint relates to information published on each telco’s website – and emailed to NBN customers – by Optus throughout the entirety of 2019, and by Telstra and TPG in April 2020. Telstra and TPG each informed customers that their NBN line speeds would be tested around 21 days after activation, and the maximum attainable speed would then be relayed to customers, with the option to move to a more suitable plan if the fastest speeds weren’t available.

Optus also made similar representations, stating that line speeds would be checked and customers would be provided with options if the result fell short of the expected speeds available on their NBN plan. However, while all three providers told customers that speeds would be tested and remedies offered in the event of underperforming plans, the ACCC alleges that neither Telstra, TPG or Optus had adequate systems in place to ensure this happened.

“Telstra, Optus and TPG each promised to tell consumers within a specific or reasonable timeframe if the speed they were paying for could not be reached on their connection, ” ACCC Chair Rod Sims said.

“They also promised to offer them a cheaper plan with a refund if that was the case. Instead, we allege, they failed to do these things, and as a result many consumers paid more for their NBN plans than they needed to.”

The ACCC alleges that some customers on Fibre to the Node (FTTN) NBN connections were not effectively informed that their plan was unable to reach the speeds advertised by each provider, and instead were left overpaying for speed tiers not suitable for their connection type. While the ACCC acknowledges that this investigation was prompted after Telstra self-reported its own breaches, the Commission is ‘disappointed’ in the offending three telcos, particularly as each had previously provided undertakings to the ACCC for similar omissions.

“What makes this behaviour even more concerning is that Telstra, Optus and TPG were well aware of these issues and had earlier given undertakings to the ACCC to provide remedies to consumers who purchased NBN plans with speeds that couldn’t be delivered,” Mr Sims said.

“We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC.”

All three telcos are currently contacting affected customers to offer refunds, an alternative plan, or the option of exiting their contract. However, Optus, Telstra and TPG customers can also contact their provider directly to check if they’re eligible for compensation.

Telstra, Optus and TPG sorry for speed issues

Telstra, Optus and TPG have each given official comment to Canstar Blue, acknowledging the issue but also highlighting the failure of NBN Co to deliver expected plan speeds.

“Optus acknowledges the ACCC’s decision to commence proceedings today and we are carefully considering this matter. As acknowledged by the ACCC, we have been contacting impacted customers to offer appropriate remediation options,” an Optus spokesperson said.

“Optus will continue to work to measure NBN speeds and inform customers of the options that are available to them.”

Telstra’s Group Executive, Consumer and Small Business Michael Acklund offered an apology to affected customers, but also called out NBN Co for leaving providers out of pocket when supplying underperforming connections.

“We self-reported these issues to the ACCC and we’re already taking steps to make sure customers are offered remedies and our processes are improved. As we’ve seen today with Optus and TPG, this issue is not isolated to us and is happening more broadly across the industry because of a complicated process,” Mr. Acklund said.

“Transparency around speeds is a complex topic, and one which NBN Co have left entirely to the RSPs, without providing the tools and information customers need so they know what to expect before they connect. At the point of moving across to the NBN for the first time, the speed a customer can get at their premises is unknown – by both the NBN Co and the RSP.

“In most cases, if NBN Co sells an RSP a connection that fails to deliver the speed the customer wants, and the RSP has paid for, the RSP is left to wear it.  The customer doesn’t receive what they want, the RSP still pays full price, and NBN Co have limited obligations to do anything about it and continue to charge RSPs for a plan they know the connection may not deliver.”

Finally, TPG also confirmed it will be offering remedies to impacted customers, but like Telstra name-checked NBN Co in its response.

“There were two key contributing factors to this issue. The first was failure by NBN Co to provide timely and accurate speed information to TPG Internet. The second was anomalies in TPG Internet’s legacy processes in place since 2017, and these have been fixed post-merger,” a TPG Telecom spokesperson said.  

“We will be contacting the impacted TPG Internet customers and will offer them the option to move down a plan and receive a refund, leave and receive a refund or stay on their current plan.”

Know your NBN speed

Canstar Blue has talked at length about the restricted speeds offered to customers on the majority of NBN connection types. While faster speed tiers including NBN 250 and NBN 1000 are now available, these are only compatible with Fibre to the Premises (FTTP) and some Hybrid Fibre Coaxial (HFC) connection types – and even the slower NBN 100 speed isn’t always available to other fixed-line connections.

This is why regulatory body, the Australian Communications and Media Authority, requires telcos to verify the maximum line speed of plans after activation, and to notify customers if their actual speed is underperforming. If a connection isn’t capable of reaching the typical peak-hour speeds offered by a provider, that provider is then required to offer the customer a more suitable plan, or give them the option of cancelling their service at no cost and with a refund where applicable.

If you’re an NBN customer, it’s important to know the plan speed you’re paying for, and to make sure the speed you’re achieving measures up to what your telco has promised. Running a free speed test during the peak 7pm-11pm traffic period is a simple way to keep track of how your plan is performing, particularly when measured against the typical evening speeds promised by your provider. If your speed falls short, it may be time to shop around for a better NBN deal.

NBN plans compared

If you’re unhappy with your current NBN plan, or looking for a cheaper monthly price, we’ve compiled a range of plans across four speed tiers in the below table.