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The ACCC is encouraging NBN customers experiencing slow connection speeds to contact their retail service provider (RSP) as they may be eligible for a refund following undertakings it has negotiated with RSPs over the last 15 months.
Telstra, Optus, TPG, iiNet, Internode, Dodo, iPrimus and Commander have each admitted that they likely made false or misleading representations about the connection speeds NBN customers with fibre-to-the-node (FTTN) and fibre-to-the-building (FTTB) connections could experience.
These RSPs advertised and sold NBN plans with maximum theoretical speeds (e.g. 100 megabits per second (Mbps) download and 40 Mbps upload) when, due to the limitations of FTTN and FTTB technologies, many consumers could never experience these speeds.
Since November 2017 the ACCC has accepted undertakings from each of these eight RSPs that they would contact more than 142,000 affected consumers to offer them a range of options, such as moving to a lower speed plan of their choice, or exiting their contract and receiving a refund.
“A large proportion, two in three affected consumers, have not responded to the letter or email from their RSP. They may be eligible for refunds, some in the hundreds of dollars,” ACCC Acting Chair Mick Keogh said.
“The ACCC is urging NBN customers to contact their NBN retailer if they have received a letter or email offer of a remedy, or think they might be entitled to a remedy.”
Customers who have recently signed up to a new NBN plan may also be eligible for a refund where the RSP advertises maximum connection speeds with the plan. Within four weeks, RSPs must check their speeds and if the speeds are below that advertised for the plan the consumer chose, the RSP must offer remedy options.
“Our message to RSPs is that if you advertise a particular connection speed and customers cannot experience that speed, you risk breaching the Australian Consumer Law,” Mr Keogh added.
“We expect RSPs to provide consumers with accurate information up front about the internet speeds they can expect to experience, and then deliver on those promises.”
In late 2017 and throughout 2018 the ACCC accepted enforceable undertakings from Telstra, Optus, TPG, iiNet, Internode, Dodo, iPrimus and Commander providing for remedies to be offered to consumers after these RSPs promoted broadband speeds they could not deliver to their customers.
Details of the ACCC’s action dealing with NBN speed claims can be found at:
- Telstra offers to compensate 42,000 customers for slow NBN speeds
- Optus to compensate customers for slow NBN speeds
- TPG to compensate customers for slow NBN speeds
- iiNet and Internode to compensate customers for misleading NBN speed claims
- Dodo, iPrimus and Commander to compensate-over-5000-customers.
For the purpose of this example, ‘Telco’ is selling the following NBN speed plans at the prices below.
- 100/40 (100 Mbps download speed and 40 Mbps upload speed): $100 a month
- 50/20: $90 a month
- 25/5: $70 a month.
On 1 December 2016, Jo purchased a 100/40 NBN plan from Telco at a cost of $100 a month.
On 7 December 2017, Jo received an email from Telco advising that her connection was only capable of maximum speeds of 37 Mbps download and 13 Mbps upload. This means she was unable to receive the benefit of the 100/40 plan as she could never receive speeds higher than 37 Mbps.
In the email, Telco offered Jo the following options:
- Option 1 – Move to a lower plan of her choice – eg, a 50/20 or 25/5 plan, and receive a refund of $360 for the difference in plan prices.
- Option 2 – Exit the plan without cost and receive a refund of $360 for the difference in plan prices.
- Option 3 – Remain on their current plan with no refund.
The amount of any refund depends on the price a consumer is paying and the price of the plan which offers a maximum speed that the consumer can receive. In this example, with a maximum speed of 37 Mbps download, Jo could receive the maximum speed of the 25/5 plan but not the 50/20 plan. Therefore, Jo is entitled to a refund of $360, being the difference between a 100/40 Plan and 25/5 Plan ($30) over 12 months.