Optus and TPG Refunding $6.5 Million to NBN Customers

Three children do school work at their family home and cattle property on April 05, 2020 in Tarpoly Creek, Australia. Lisa Maree Williams/Getty Images

The Australian Communications and Media Authority (ACMA) announced that Optus and TPG would be refunding $6.5 million to tens of thousands of National Broadband Network (NBN) consumers for not informing them suitably of underdelivered internet speeds.

Under ACMA rules, telcos must verify maximum internet speeds when migrating customers to the NBN and notify them when speeds cannot meet what was advertised.

“Optus and TPG were charging these people for internet speeds they could not get,” ACMA Chair Nerida O’Loughlin said.

As of March 23, Optus and TPG have both issued refunds of more than $4.4 million ($US3.28 million) and $2.1 million respectively for failing to notify more than 38,000 customers that the maximum speed advertised in their plans were not attainable on the NBN provided to them.

O’Loughlin said that when telcos cannot deliver the internet speeds as advertised customers are entitled to transfer to a cheaper, lower-speed plan or leave the contract at no cost, but “these customers were left in the dark and denied the option to move to a cheaper contract or walk away.”

In July 2021, Optus self-reported to the ACMA that from September 2018 to December 2020 (pdf), it had failed to inform more than 34,000 customers that they were not receiving the level of service they had purchased.

In October 2021, TPG advised ACMA that from September 2018 to April 2021 (pdf) it had failed to provide more than 4,400 customers with the notifications needed.

O’Loughlin said that there is a “significant” scale of service failure and “our actions will ensure the top three telcos are more vigilant delivering the internet service their customers expect and have paid for.”

ACMA has issued Optus with a remedial direction and TPG offered a court-enforceable undertaking to the ACMA, which it has accepted.

Both telcos are now required to commission an independent audit of their relevant compliance systems and implement effective systems and governance processes to ensure future compliance.

The news comes as ACMA previously issued Telstra in July 2021 with a remedial direction for failure to notify more than 49,000 customers of underperforming internet speeds with around $25 million in refunds expected to be paid.

In August 2021, the consumer’s watchdog, ACCC, sued Telstra, TPG, and Optus, the three largest internet telcos in Australia for “making alleged false or misleading representations in their promotions of some 50Mbps and 100Mbps NBN plans.”

“Telstra, Optus, and TPG each promised to tell consumers within a specific or reasonable timeframe if the speed they were paying for could not be reached on their connection. They also promised to offer them a cheaper plan with a refund if that was the case.

“Instead, we allege, they failed to do these things, and as a result many consumers paid more for their NBN plans than they needed to,” ACCC Chair Rod Sims said.

However, all three telcos have allegedly promised the ACCC to compensate consumers before the court case is finalised.

ACMA said that it can commence proceedings in the Federal Court if Optus fails to meet the requirements of its remedial direction or TPG does not comply with its enforceable undertaking.