Court dismisses ACCC’s case against TPG over prepayments

11 October 2019

The Federal Court has dismissed the ACCC’s recent consumer law case against TPG, finding that representations made by TPG Internet Pty Ltd (TPG) about prepayments customers had to make in its internet, home telephone and mobile plans were not false or misleading, and that a term in its contracts which allowed TPG to keep prepaid funds when customers exited their plans was not unfair.

From 2013 some of TPG’s personal mobile, home telephone and internet plans required customers to make a “prepayment” of at least $20 to cover potential usage outside what is included in their plans, such as excess data usage and phone calls to ‘1300’ numbers.

When a customer’s prepaid balance falls to below $10, TPG directly debits customers so that the amount will return the prepayment to $20. On cancellation of a customer’s plan, they are unable to use the full amount of the prepayment. As a result, TPG retains at least $10 of the prepayment when a customer cancels their plan.

“The ACCC argued that TPG made false or misleading representations about ‘prepayments’ of $20 made by its prepaid customers, by not disclosing that the automatic top-up effectively meant these customers could not use up all their prepayment before leaving their contract,” ACCC Chair Rod Sims said.

“We brought this case because we believed TPG misled its prepaid customers about their ability to use up their full prepayment for services outside their plans, and to obtain a refund of any unused funds when they ended their contract.”

“We will continue to take cases against telco businesses that we consider are making misleading claims about their services,” Mr Sims said.

The ACCC is carefully considering the judgment.

Background

The ACCC first instituted proceedings against TPG in December 2018.

This case is unrelated to the proceedings before the Federal Court concerning the ACCC’s opposition to the merger of TPG and Vodafone Hutchison Australia.

Release number: 
186/19
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