Optus will refund nearly 9000 customers who have been unable to reach speeds on the NBN that were advertised, the second Australian telco to do so in the last month.
Optus admitted that it had likely contravened Australian Consumer Law by engaging in “misleading or deceptive conduct” over the speeds it advertised with its NBN plans.
It has now entered into a court-enforceable undertaking with the ACCC, and will be offering refunds, plan moves, discounts and free exits to 8,700 impacted customers.
From September 2015 to the end of June this year, Optus offered a number of plans on the NBN and advertised a range of speeds, including the “boost max”, which claimed to offer speeds of up to 100 megabits per second (mbps) and upload speeds of up to 40 mbps (100/400 mbps).
The ACCC found that nearly of half of the Optus customers on this plan could not reach those speeds, and 20 percent of them couldn’t even reach half of the advertised speeds.
A quarter of consumers on the 50/20 mbps plan couldn’t receive those speeds, while more than one thousand customers on the slower 25/5 mbps plan still couldn’t receive those speeds.
This was due to technical limitations on the customers’ fibre-to-the-node or fibre-to-the-building connections, making the advertised speeds impossible to reach.
ACCC chair Rod Sims said Optus is the second Australian telco to enter into such an agreement, after Telstra did the same last month.
“Worryingly, many affected Optus FTTN customers could not even receive the maximum speed of a lower-tier plan. This is a concerning trend we have seen throughout the industry and we are working to fix this,” Sims said.
“Affected customers should carefully consider the remedies Optus is offering them to assess which best suits their needs. In some cases, consumers may consider it preferable to simply exit their contract with a refund rather than accept a service that does not meet their needs.”
Optus will contact all impacted customers via email or letter by the start of March next year, and will also be checking within four weeks that all new customers are reaching the advertised speeds.
“This undertaking is yet another step towards an industry standard of providing accurate information to consumers about the speeds they can achieve in real-world conditions and ensuring that consumers get what they pay for,” Sims said.
“We are continuing to investigate other retail service providers selling NBN broadband plans, and will take enforcement action if we consider that they are not delivering on their promises to customers.”
An Optus spokesperson said the telco has acknowledged that its customers were misled.
“Optus acknowledges that it did not have the appropriate procedures in place to confirm the speed of the NBN service at the time of purchase by affected customers. We apologise to customers who have been affected by this error and are putting a process in place to rectify this issue,” the spokesperson said.
“We have been working cooperatively with the ACCC to remediate affected customers for differences between their chosen speed plan and the speed obtained.”
Last month Telstra moved to offer refunds to more than 40,000 customers over the same issue, while TPG is understood to currently be in discussions with the ACCC.
At the time, shadow minister for communications Michelle Rowland said the announcement was “only the tip of the copper iceberg”.
“The copper NBN has been exposed as a dud. It’s a tragedy that Turnbull is spending $50 billion of taxpayers’ money on a second-rate network that is denying consumers the speeds they are willing to pay for,” Rowland said.
The ACCC also recently launched a separate inquiry into the NBN wholesale service standards and whether regulation is needed to improve the NBN’s service.