Optus pays for 'max cap' advertising

18 May 2011

SingTel Optus Pty Ltd has paid 27 infringement notices totalling $178,200 issued by the Australian Competition and Consumer Commission.

The ACCC issued the infringement notices in relation to Optus' advertisements for its "Max Cap" plans. The ACCC had reasonable grounds to believe Optus made false or misleading representations about the price of its services and engaged in conduct that was likely to mislead consumers about the nature and characteristics of its services.

Acting ACCC chairman Peter Kell said telecommunication companies must advertise their services in a clear and accurate way and ensure they are not false or misleading.

"The ACCC has been keeping a close watch on the telecommunications industry for a while now to ensure that consumers get accurate information. This is another example of the clear message the ACCC is sending to this industry: get your advertisements right," Mr Kell said.

Throughout July and August 2010, Optus conducted a promotional campaign in which it advertised its "Max Cap" plans in various print and online advertisements. In the ACCC's view, these advertisements gave the impression that a consumer could purchase these cap plans and expect to pay a maximum specified amount per month, when in fact the specified amount was the minimum the consumer would pay each month.

In order to issue infringement notices, the ACCC must have reasonable grounds to believe that there has been a breach of certain consumer protection provisions.  The view was formed that Optus contravened the Trade Practices Act 1974* which prohibits a corporation from making a false or misleading representation about the price of goods or services.

"If you advertise a service as a '$49 Max Cap' when $49 is the minimum that consumers have to pay, then you risk breaching the law by misleading consumers about the cost of the service," Mr Kell said.

In addition, a number of these advertisements gave the impression that the consumer could use their call credit to call "anyone", when in fact only certain call types were included.

The ACCC also had reasonable grounds to issue infringement notices on the basis that it believed that Optus contravened the Act by engaging in conduct that is liable to mislead consumers about the nature or characteristics of any services.

"Claims that a service allows consumers to call 'anyone' are likely to be misleading if the reality is that some types of calls are excluded," Mr Kell said.

The ACCC decided it was appropriate to issue 27 infringement notices ($6,600 for each notice) to Optus based on the number of advertisements published and the various representations made within those advertisements.

Information about the ACCC powers to issue infringement, substantiation and public warning notices is available on the ACCC website at www.accc.gov.au/notices

*On 1 January 2011 as part of Australian Consumer Law amendments, the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010.

Release number: 
NR 084/11
Media enquiries: 
Mr Brent Rebecca - (02) 6243 1317