Telecommunications carrier and service provider AAPT Limited will correct its 'Smartchat' long distance call advertising after discussions with the Australian Competition and Consumer Commission.
"The ACCC believes AAPTs advertising misled consumers that Smartchat long distance rates were charged a single flat rate, applying 'all day every day'," ACCC Chairman, Professor Allan Fels, said today. "Smartchat rates actually consist of peak, off-peak and economy rates for long distance calls within Australia and peak and off-peak for international calls, applying at particular times throughout each day.
"The ACCC was also concerned that AAPTs advertising expressly emphasised that there was no 'small print', but it was AAPTs clear intention to treat all consumers who 'registered' as Smartchat users to become full AAPT customers by later providing them with a contract containing detailed terms and conditions.
"The advertisements omitted important terms and conditions, significant qualifications and assumptions, relating to the advertised charges.
"The ACCC believes AAPT omitted to make clear or disclose:
- that a registered Smartchat user who later signed to become an AAPT customer would, by default, automatically be preselected to AAPT, as the customer's preferred carrier, when preselection became available in that customer's area
- Smartchat rates are not available to consumers calling mobile telephones
- Smartchat rates can be accessed only by consumers calling from within certain call zones or areas, eg consumers within the Sydney (02) number calling area
- a customer credit check may be required
- until non-code access is available, the use of AAPTs override code 1414 number is available only to registered customers of AAPT."
The ACCC concluded that the advertising was misleading and deceptive and risked breaching the Trade Practices Act.
"AAPT has given an enforceable undertaking to stop all advertising material containing statements that suggest AAPTs long distance services are offered as a single flat rate. AAPT has undertaken to include in future advertisements and in information provided verbally by call centre staff all important consumer information relating to the Smartchat services, in particular, when relevant, preselection information."
During the ACCC investigation, it was considered that many elements of AAPTs advertising had failed to comply with the industry's own Fair Call Advertising Guidelines, only recently developed by the industry in close cooperation with the ACCC.
"Indeed it was the ACCCs previous enforcement action which had directly lead to the development of the Fair Call Advertising Guidelines," Professor Fels said.
"Today's action should reinforce the Fair Call Advertising Guidelines and previous actions taken on misleading and deceptive advertising of telecommunications services and products.
"The ACCC is concerned that advertising in the newly liberalised telecommunications industry should be accurate and comply with the Trade Practices Act.
"The ACCC is scrutinising telecommunications advertising, in particular with the imminent introduction of preselection (non-code access) to new carriers in the market. It regards telecommunications markets and consumer product offerings as frequently complex, particularly where bundling of services is involved, and not always easily or fully understood, even among sophisticated consumers.
"In such a complex and fast moving industry the ACCC will be assiduous in working to see that consumers are correctly and well informed and able to make a selection appropriate to their circumstances. The ACCC will act quickly in circumstances where it believes that consumers are being mislead and that some remedial action must be taken.
"The ACCC was impressed by AAPT's cooperation and speedy response. AAPT readily acknowledged its advertising needed fine tuning and made changes and corrections comprehensively. At the same time it has implemented measures to compensate consumers genuinely misled by the advertising, to demonstrate good faith and the value AAPT placed upon customer relationships."
Further information Professor Allan Fels, Chairman, (03) 9290 1812 or pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (06) 264 2808