Optus subsidiary Pre Paid Services (PPS) has been called to front the Federal Court over misleading advertising on calling card products.
The Australian Competition and Consumer Commission (ACCC) alleged the company made certain false or misleading representations in contravention of the Trade Practices Act when advertising its calling card products.
The ACCC alleged that both Pre Paid Services and its reseller Boost Tel promised "certain phone cards would provide consumers with a specified amount of call time when that was not the case."
The two companies advertised that no fees applied to the use of the card other than timed call charges. The ACCC alleges users did in fact find themselves charged with additional fees.
Optus has expressed frustration with the ACCC's decision to take it to court over the matter. The carrier says previous efforts to resolve the matter fell on deaf ears.
"Optus is surprised that the ACCC has resorted to litigation given the efforts we have made to come to a resolution," an Optus spokesperson told iTnews in an email.
The carrier said its subsidiary had "been in discussions with the ACCC for some months" regarding the allegations.
Optus claims the ACCC had not returned its latest correspondence, sent in mid-May.
Optus claims PPS had taken "every reasonable step" to remove the advertising the competition watchdog took issue with.
The ACCC is seeking corrective advertising, community service orders and the court costs as well as an injunction order to stop the Optus subsidiary and reseller from misleading customers.
The ACCC refused to comment, as the dispute was now a matter for the Federal Court.
The allegations follow recent Federal Court action taken by the ACCC against Tel.Pacific and Cardcall in relation to pre-paid phone cards.
Both cases found the companies were misleading and deceptive in the promotion of their products.
Prepaid Services and Boost Tel will have their case fast tracked for a scheduling conference in Perth's Federal Court on September 14, 2009.