Optus has been hit with a $51,000 penalty by the consumer watchdog after the telco claimed it could offer cable broadband services with ‘NBN-like speeds’.
The telco made the claim about its existing broadband plans in advertisements that appeared on websites, billboards, shopping centre posters, catalogues and flyers between January and August.
However, the plan advertised by Optus only offered download/upload speeds of 30 Mbps down and 2 Mbps up. Optus also offered a 100/2 Mbps service, but the additional charge for this plan was not mentioned in the advertisements.
The upload speeds on both of these plans were significantly slower than the speed tiers available on NBN’s fibre-to-the premises (FTTP) network, which offers 25/5 Mbps, 25/10 Mbps, 50/20 Mbps and 100/40 Mbps speed tiers.
The ACCC issued Optus with five infringement notices over the advertisements on the basis that the claims were false or misleading, along with a total of $51,000 in fines.
While the payment of an infringement notice is not an admission of guilt, Optus has also acknowledged the advertisements could have contravened the Australian Consumer Law (ACL).
The telco has also made an enforceable undertaking to not make claims about plans having ‘NBN-like speeds’ unless they actually do, and to set up a compliance program reviewed by a third party.
Customers who signed up to a cable internet plan while the advertisements were running are allowed to cancel their contracts, with any setup fees refunded.
In a statement, ACCC Chairman Rod Sims said broadband internet providers must ensure their advertising and product offers to consumers clearly and accurately represent the download and upload speeds they can expect to achieve.
“The ACCC will continue to closely monitor the market for false or misleading claims about internet performance and will not hesitate to take appropriate enforcement action if necessary," he said.
An Optus spokesperson told iTnews it has taken steps to rectify the situation.
“Optus has taken the following steps to rectify the issues that were identified including: writing to customers who purchased the product between January 1 and August 23 2015; and provided an undertaking not to use the unqualified phrase ‘NBN-like speeds’ in promotions for Optus HFC cable service," the spokesperson said.
Optus’ hybrid fibre-coaxial (HFC) cable network, used to deliver cable broadband services, has come under scrutiny in recent months after a leaked document showed the NBN has considered overbuilding parts of the network that in “a degraded state” and “not fit for purpose”.