iiNet and Internode to compensate customers for misleading NBN speed claims

20 March 2018

Internet providers iiNet Limited and Internode Pty Ltd will compensate more than 11,000 customers who could not reach the internet speeds they were promised in their NBN contracts, following an investigation by the ACCC.

Remedies will now be offered to more than 8,000 iiNet customers and more than 3,000 Internode customers. Affected customers can choose from options including moving to a lower tier speed plan with a refund, or exiting their plan without cost and receiving a refund.

“iiNet and Internode have admitted that between 2015 and mid-2017, they both likely engaged in misleading or deceptive conduct or made false or misleading representations by promoting and offering NBN plans with maximum speeds that could not be delivered,” ACCC Commissioner Sarah Court said.

iiNet advertised its highest-speed plan as “Up to 100Mbps. This is our fastest option and is sure to impress”, while Internode advertised its highest speed plan as “NBN Platinum: up to 100/40 Mbps”.

“Internet service providers must provide accurate information to customers about the speeds they can access on the NBN. Many customers could not reach the maximum speeds advertised by iiNet and Internode because their NBN connection was not capable of delivering it. Some customers couldn’t even receive the maximum limit of lower speed plans,” Ms Court said.

iiNet and Internode will contact affected customers by email or letter by 27 April 2018, tell them the maximum speed their connection can receive (which is only known once a customer is connected to the network), and explain their compensation options.

“iiNet and Internode customers should carefully review any email or letter from their provider and choose a remedy as quickly as possible. The options available to each customer depends on their plan, but many can move to a lower speed plan and receive a refund, or exit their plan without cost,” Ms Court said.

The ACCC has now received five court-enforceable undertakings from internet service providers in relation to NBN speed claims.

“Fixing misleading claims about internet speeds during the transition to the NBN is an enforcement priority for the ACCC and we strongly urge other providers to act quickly to ensure their advertising is accurate,” Ms Court said.

The undertakings are available at iinet undertaking and Internode undertaking.

Note to editors

  • The conduct affected iiNet and Internode customers who purchased fibre to the node (FTTN) and fibre to the building (FTTB) NBN plans.
  • 7,621 (64%) customers on an iiNet 100/40 Mbps FTTN plan could not receive the speeds they purchased. Of those 7,621 customers, 1,925 could not even receive the speeds of the next lower plan, 50/20 Mbps.
  • 1,720 (34%) customers on an Internode 100/40 Mbps FTTN plan could not receive the speeds they purchased. Of those 1,720 customers, 479 could not even receive 50/20 Mbps.
  • Fewer customers were affected on the companies’ FTTB plans.
  • Neither iiNet nor Internode has offered a 25/5 plan since 13 December 2017. Customers who want to move down to a 25/5 plan should consider choosing to exit their contract, then moving to another provider who offers this speed.

Background

iiNet and Internode are both wholly owned subsidiaries of TPG Telecom Limited.

They follow Telstra, Optus and TPG in providing undertakings to the ACCC for misleading customers into paying a price for a service they could not receive.

On 20 December 2017, the ACCC accepted a court-enforceable undertaking from TPG Internet Pty Ltd (TPG) in relation to conduct similar to that of iiNet and Internode. TPG is also wholly owned by TPG Telecom Limited: TPG Internet Pty Ltd - s.87B undertaking

Previously, the ACCC accepted court-enforceable undertakings from Telstra Corporation Limited and from Optus Internet Pty Limited in relation to conduct similar to that of iiNet, Internode and TPG. Telstra and Optus each made representations about speeds available to customers on their respective NBN FTTN and FTTB broadband plans that were likely to contravene the Australian Consumer Law.

Telstra’s court-enforceable undertaking was accepted on 7 November 2017: Telstra Corporation Limited - s.87B undertaking

Optus' court-enforceable undertaking was accepted on 11 December 2017: Optus Internet Pty Ltd - s.87B undertaking

 

 

Release number: 
43/18
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