Optus fined $5.26m for Think Bigger ads

Corrective advertising and injunction not enough, Federal Court finds.

The Federal Court has ordered Optus to pay $5.26 million in fines after being found to have misled customers in advertising some of its broadband plans.

The penalties came in addition to corrective advertising, allowing affected customers to exit contracts without penalty and a court-appointed injunction on specific advertising from Optus on the issue.

The telco's 'Think Bigger' broadband advertisements, run last year for the telco's ADSL and cable plans, were found by the Federal Court last year to have misled customers by failing to adequately notify customers that their broadband service would be throttled during both on-peak and off-peak times if they exceeded the quota of one period.

"After the peak allowance was depleted, the consumer would not get the benefit of any of the remaining off-peak entitlement... at broadband speeds," the judgment, filed last November, stated.

"Customers were not being sold plans which gave them the nominated amount of broadband. They were given plans which had that amount as the maximum usage which could be obtained and, even then, only by careful use," Justice Perram wrote.

Customers affected by the advertising were able to exit their contracts without penalty following the Federal Court's decision, while the telco was made to issue advertising correcting the initial claims.

The court decision also prompted a public apology from Optus chief Paul O'Sullivan, but the telco continued to insist it had never received complaints from customers over the advertising.

Justice Perram had rejected arguments by Optus that the "misleading nature of the advertisement [was] reduced by the statements Optus makes, or seeks to have made on its behalf, at the point of sale."

Optus had argued that advertisements only served to "put customers on inquiry" and that the full details of the plans were disclosed at the point-of-sale.

Final penalties will be discussed in a future hearing.