A misleading promotional brochure for a mobile phone package has led to court-enforceable undertakings being provided by a mobile telephone network wholesaler and reseller, Signal Telecommunications Pty Ltd and Digital Discount Centre Pty Ltd.
The undertakings follow negotiations between the Australian Competition and Consumer Commission and both companies, after an ACCC investigation sparked by a consumer complaint.
From March 1998 to August 1998, Signal Telecommunications, through Digital Discount Centre, promoted a mobile phone package, referred to as the "Phone Saver Plan 25", through a brochure. The brochure was distributed at more than 50 petrol station sites across Victoria.
The brochure did not disclose several costs that would be incurred by consumers and in particular failed to disclose the applicability of a minimum call cost during off-peak periods. This compromised the ability of consumers to make informed decisions.
"Mobile phone providers must clearly disclose the substance and effect of all conditions, particularly those conditions relating to price," ACCC Chairman, Professor Allan Fels, said today.
Signal Telecommunications and Digital Discount Centre will write a letter of apology to all affected customers informing them that:
- Signal Telecommunications will not take action to recover early termination payments due from customers who chose early termination before the time of the undertaking;
- Signal Telecommunications will give all active customers a $50 credit toward the payment of their account; and
- active customers will have the option to exit the contract during the remaining term of the contract at no penalty.
This will include Signal Telecommunications foregoing recovery of the handset. Both companies will also implement a trade practices compliance program, having regard to the Australian Standard for Compliance Programs AS 3806 - 1998.
The ACCC acknowledged the cooperation of Signal Telecommunications and Digital Discount Centre in resolving the matter