ACCC appeals court decision on TPG prepayments

8 November 2019

The ACCC has appealed from the Federal Court’s decision to dismiss its case against TPG Internet Pty Ltd (TPG) for alleged false or misleading representations it made about ‘pre-payments’ customers had to make on its pre-paid internet, home telephone and mobile plans.

The ACCC had alleged that, from March 2013, TPG made false or misleading representations about ‘pre-payments’ of at least $20 which customers had to pay upfront to cover potential usage outside what was included in their plans.

The ‘prepayment’ was automatically topped-up to the original amount, usually $20, when the prepaid balance fell below $10. This ‘prepayment’ was non-refundable even when a customer cancelled their plan, meaning TPG almost always retained at least $10.

“We alleged that by representing this was a ‘prepayment’, consumers were misled by TPG into thinking they could use all the money they had prepaid for out-of-plan services, when this was not usually possible,” ACCC Chair Rod Sims said.

The trial judge did not accept the ACCC’s argument that the operation of TPG’s ‘prepayment’ arrangements was not adequately disclosed to consumers. The Court considered a reasonable consumer would take the time to understand contract terms of importance to them before signing up to a plan, even though in this case the terms were only accessible after multiple clicks.

“We are appealing from this decision because we believe the Court made an error in deciding that TPG’s representations about this mandatory prepayment were not false or misleading,” Mr Sims said.

“Consumer awareness of important terms should not be expected where they are contained in the fine print of a long and detailed contract or, in the case of online contracts, after multiple clicks.”

“We remain concerned that TPG misled its prepaid customers about their ability to use up their full prepayment and to obtain a refund of any unused funds when they ended their contract,” Mr Sims said.

A hearing for the appeal before the Full Federal Court will be fixed at a later date.

Background

The ACCC’s case against TPG was dismissed in October 2019.

The ACCC instituted proceedings against TPG in December 2018.

The ACCC’s case at first instance also included an allegation that the contract term providing that these pre-payments were not refundable was an unfair contract term. The ACCC has not appealed this aspect of the judgment. 

Release number: 
210/19
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