Optus and TPG have handed customers refunds totalling $6.5 million after not delivering on advertised NBN speeds, according to the Australian Communications and Media Authority (ACMA).
Around 38,000 customers from both companies were affected by the slower-than-advertised internet speeds, a breach of their obligations.
“Optus and TPG were charging these people for internet speeds they could not get,” ACMA Chair Nerida O’Loughlin said.
“These customers were left in the dark and denied the option to move to a cheaper contract or walk away.”
Optus and TPG self-reported the incidents to ACMA and have been ordered to undergo independent audits of its compliance systems and governance to mitigate against this happening again.
Customers paying for internet plans that don’t match the service they receive has been a bane of the sector’s regulators for years.
In 2017, Telstra issued refunds to more than 40,000 customers for not reaching advertised internet speeds.
Over a six-month period in 2018, some 75,000 customers from eight telcos were issued refunds for the same issue – in some cases, over 70 per cent of customers weren’t getting the speeds they paid for.
Last year, the Australian Competition and Consumer Commission (ACCC) took Telstra, Optus, and TPG to court for misleading “hundreds of thousands” of consumers.
O’Loughlin is optimistic that more refunds, enforceable undertakings, and remedial directions will fix the problem.
“The scale of service failure by these companies is significant,” she said. “Our actions will ensure the top three telcos are more vigilant delivering the internet service their customers expect and have paid for.”
Telcos have previously put the blame on NBN Co for selling them connections that can’t deliver on promised speeds, leaving the telco in the lurch with seemingly little recourse against NBN Co.
And it’s not just advertised speeds that have been a problem.
In 2018, Optus was caught misleadingly telling customers that they had to upgrade to NBN sooner than needed in an effort to keep customers on the company’s books.
Optus did it again and was fined $6.4 million.