The Australian Competition and Consumer Commission today launched court action against Telstra Corporation Ltd alleging false and misleading representations about its Local Call Saver 15 Flexi-Plan.
The action, filed in the Federal Court, Melbourne seeks declarations, injunction, and corrective advertising.
The ACCC alleges that Telstra has engaged in conduct which contravenes sections 52, 53(aa) and (e) of the Trade Practices Act 1974. The conduct comprises representations made to the public on various occasions in June and July 1996 that calls made under Telstras Local Call Saver 15 Flexi-Plan (CS15) are cheaper and more widely available than they actually are.
Specifically, the representations include the following claims:
- that if customers make more than two local calls per day then a discount of 15% applies which results in all local calls costing 21 cents;
- if customers spend more than $15 per month (two calls per day) then all local calls above that attract a 15% discount;
- discounts are available on all local calls if the customer is registered for CS15; and
- CS15 is available to all customers without limitation.
The ACCC alleges that the representations are false, misleading or deceptive in that:
- the minimum charge per call under CS15 is 21.81 cents and not 21 cents; furthermore, the first $15 worth of local calls do not attract any discount, therefore the average charge per call varies between 25 cents and 21.81 cents depending upon the number of calls made;
- local calls made after the customers bill reaches $100 do not attract any discounts, therefore the average charge per call increases above the minimum of 21.81 cents if the customer makes more than 400 calls;
- CS15 excludes various types of local calls from the discount, which are listed in the tariff lodged by Telstra with AUSTEL;
- CS15 is not available to all customers, particularly businesses and customers not connected to computerised telephone exchanges.
The ACCC has also expressed concern about a news release issued by Telstra on Wednesday which falsely stated that the company had been required to make that statement by the ACCC. In fact, if the matter had been resolved out of court, the ACCC would have required Telstra to issue a statement including the words: "following a complaint by the Australia Competition and Consumer Commission concerning Local Call Saver 15 Flexi-Plan and associated representations made by Telstra, Telstra has provided enforceable undertakings which require it to provide an accurate and easily understood explanation of the operation of Local Call Saver 15 Flexi-Plan, particularly information regarding average price per call and the factors which limit entitlement to the discounts available." No such resolution was achieved.
The ACCC believes the news release itself may have been misleading in its representations about the Local Call Saver 15 Flexi-Plan.
The ACCC decided to institute court proceedings after Telstra had failed to provide undertakings to the Commission addressing its concerns.