The Australian Competition and Consumer Commission (ACCC) is continuing to crack down on dodgy NBN claims, announcing that the Federal Court has fined broadband provider Activ8me $250,000 for misleading and false advertising.
Activ8me – the trading name of Australian Private Networks Pty Ltd – has admitted to violating Australian Consumer Law in several direct mail and online banner advertisements between June and November of 2018.
The ‘Misleading representations’ were identified by the ACCC in advertising relating to Activ8me’s ‘Opticomm’ FFTP plans, with falsehoods found in both the listed plan prices and the maximum speeds advertised.
According to the ACCC, Activ8me told customers that its FTTP plans provided speeds of up to 100Mbps for $59.95 per month, with no setup fees. However, Acti8me failed to disclose the following: that a $99.95 setup fee applied on month-to-month plans, that its $59.95 plan was only available on NBN 12 (therefore providing a maximum speed of 12Mbps), and that a Premium 100Mbps plan would actually cost customers $89.95 per month.
The ACCC stated that Activ8me also made other false claims about unlimited data, plan speeds, and total costs and prices, with incorrect or misleading information found on more than 81,000 advertisements mailed to customers during the June to November period. Almost 800 customers signed up to Activ8me’s FTTP plan during the period in question, leading to the ACCC instituting proceedings against Activ8me in December.
Several months on, the Federal Court has now ruled in favour of the ACCC – ordering Activ8me to not only pay a hefty $250,000 penalty, but also to refund setup fees and cancellation costs for affected customers. The company must also send each customer a corrective notice, and implement a consumer law compliance program.
News: Activ8me to pay $250,000 in penalties and refund customers for misleading conduct https://t.co/unC2UZQLev
— ACCC (@acccgovau) March 15, 2019
ACCC: Activ8me’s second breach in 12 months
Embarrassingly for Activ8me, this isn’t the first time the telco has come under ACCC fire. In March of 2018, the consumer watchdog took aim at Activ8me’s claims regarding its Sky Muster NBN service: namely, that Activ8me had advertised its satellite NBN plans as being endorsed by the ACCC.
While the ACCC did cite Activ8me as operating the highest number of Sky Muster satellite services, it had not recommended the telco over competing providers, nor called it – as Activ8me had claimed – ‘Australia’s #1 Sky Muster provider”. Activ8me was subsequently fined $12,000 for misuse of the ACCC’s logo and report findings.
The ACCC referenced the March penalty when initiating court proceedings against Activ8me in December. At the time, ACCC Deputy Chair Delia Rickard stated that the decision to take Activ8me to court showed how seriously the Commission takes breaches in conduct.
Regarding this week’s ruling, Ms. Rickard called Activ8me’s claims “blatantly wrong” and misleading.
“Businesses are warned that misleading customers will result in ACCC action and potentially serious consequences.” Ms Rickard said.
NBN plans: the fine print to look for
Although affected Activ8me customers will hopefully be fully refunded and/or compensated, the case does highlight why it’s so important for telcos to transparently advertise their NBN services – and why consumers should be as informed as possible when looking for a broadband provider.
If you’re shopping for a new broadband service, here’s what to keep in mind when comparing NBN plans and providers.
If you’re opting for a month-to-month plan, you may find yourself paying slightly more each month than for the same plan on a 12 or 24-month contract. Be aware that casual monthly plans may also incur higher setup costs than a telco’s equivalent lock-in plans, including initial activation fees and modem charges.
Even if your prospective plan comes with the option to bring your own modem, this may not be feasible – you’ll need a modem that’s NBN-ready, and that can be configured to work with your connection type. Many customers will find it easier to buy a pre-programmed ‘plug and play’ modem or router directly from their provider, but prices will vary. Although modems are frequently included free on longer-term NBN plans, make sure you’re aware of how much your modem will cost before signing up.
NBN providers offer four speed tiers to customers:
- NBN 12: 12 Mbps download, 1 Mbps upload. Also known as Basic Evening Speed.
- NBN 25: 25 Mbps download, 5 Mbps upload. Also known as Standard Evening Speed.
- NBN 50: 50 Mbps download, 20 Mbps upload. Also known as Standard Plus Evening Speed.
- NBN 100: 100 Mbps download, 40 Mbps upload. Also known as Premium Evening Speed.
Download speeds refer to the maximum speed achieveable on each plan tier, but your real-world NBN speeds will most likely be slower. When shopping for a plan, look for the Typical Evening Speed listed by providers – this is the average speed customers experience during peak periods of between 7pm and 11pm, and is a better indication of how fast your connection will actually be.
Most broadband plans now include unlimited monthly data, but customers should be aware that telcos usually impose ‘fair use’ policies on customers. This is unlikely to affect the overwhelming majority of users, but some providers may suspend, cancel, or fine customers who breach fair use policies, usually through activities such as operating a business on a personal plan.
If you do sign on for a metered or limited data plan, make sure to keep track of your usage, and know in advance if you’ll be charged for excess data use (or simply have your service slowed or suspended until your billing cycle resumes).