TPG pays the price of dodgy advertising
Sometimes we feel a bit sorry for companies that fall foul of ACCC. They’re small. They are naïve. They really didn’t know they were breaking the law.
But how sorry can we be for TPG, whose advertisements in late 2008 could hardly have seemed more determined to sail close to the trade practices wind, and beyond ?
Now ACCC has taken the company to task. We’ll explain what happened and its consequences in plain english.
Anyone could see it coming
In November 2008, CSP Central reported an unqualified and untrue TPG advertisement for a $59.95/month ‘unlimited calls & text’ mobile plan.
A couple of weeks after we blew that whistle, the advert was improved but not cured, by at least stating basic qualifications.
In December 2008, we pointed put another TPG ad that wouldn’t please the regulator. By January, that one was repaired.
Surprise ! Surprise !
On 11 February 2009, ACCC announced that TPG has been pinged for falsely advertising a $59.95/month ‘unlimited’ plan between September and December 2008. And yes, it’s the one we highlighted in November.
What ACCC says
The ACCC contends that TPG made false representations and engaged in misleading and deceptive conduct in contravention of sections 52 and 53 of the Act by representing in its advertisements that the Unlimited Cap Saver plan:
- includes unlimited calls and text for $59.99 per month when, in fact, there are multiple exclusions to the plan (including calls to 1800, 13 and 1300 numbers, directory assistance, international calls and SMS, calls to MobileSAT, premium SMS, and calls to operator assistance), and
- is available for the purchase price of only $59.99 per month when, in fact, the minimum charge for the Unlimited Cap Saver Plan is $79.99 due to an additional $20 SIM card fee payable on registration.
What does TPG have to do about it ?
Enforceable undertaking
TPG has given an enforceable undertaking to ACCC. Basically, that equals court orders. If TPG breaches it, it’s equivalent to breaching a Federal Court order.
The big one
In some court cases, the Federal Court has said that it’s asking too much to require a company to undertake not to say or do anything misleading. The normal law says companies must not do that, but the extra penalties that are incurred by breaching orders should only be attached to quite specific behaviour.
Well, either (a) TPG has been very badly advised or (b) its advertising history has been so poor that it was well advised to give a broad undertaking and keep ACCC happy.
TPG is now one of the few businesses in Australian history that has given a broad, enforceable undertaking not to engage in misleading or deceptive conduct. This is a huge undertaking to be tied to. It raises the company’s legal risk profile to extreme levels.
Corrective notice in website
Next, TPG must publish a lengthy corrective notice on its website. owning up to its dodgy advertising.
It only admits that TPG ‘may’ have contravened that law. That shows the benefit of cooperating with ACCC when you’re wrong. They may at least allow you the dignity of saying you ‘may’ have acted illegally.
Trade Practices Compliance Program
This is a standard ACCC requirement: a three year organisational training and compliance program. It’s a costly and serious business.
Our take on it
Dodgy advertising isn’t just bad because it harms consumers. It also disadvantages CSPs that play by the rules. Why should TPG enjoy customer and revenue growth based on tricky adverts ?
This undertaking puts both TPG and ACCC under pressure, of different kinds. TPG can be caned for future breaches of honest advertising law. But ACCC needs to use the cane if occasion requires. If TPG gets away with more ‘clever’ advertising, ACCC would discredit the enforceable undertaking process.
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3 Responses to “TPG pays the price of dodgy advertising”
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It was sad to see such a good value plan disappear from sale.
Finally TPG pays for its well developed misleading practices!
I’m one of TPG’s ex unsatisfied customers.
I purchased one of their internet plans and so TPG never gave me any support regarding the not well working product (adsl) also misleading regarding download quota, the list it’s so long!
This punishment has arrived a bit late as TPG has already achieved its goal, yes I’m talking about profit coming from misleading advertising!
This article once again highlights the dangers of using the word ‘unlimited’. Telcos and ISPs also need to remember that the Telecommunications Consumer Protections Code 628:2007 (clause 4.1.6) also imposes an obligation where the word unlimited (or equivalent is used)to “ensure that it identifies which elements of the offer are ‘unlimited’ and states any other conditions that may qualify the offer.”