TPG Guilty Of Misleading Consumers

  • Advertising strategy wrong
  • Didn’t include set up fee in ad
  • Penalty yet to be decided

The Federal Court in Melbourne has found advertisements for TPG Internet Pty Ltd's $29.99 Unlimited ADSL2+ campaign to be false and misleading. The campaign included TV, newspaper, radio and website advertisements.  As mentioned in a previous report, the ACCC took the Telco service provider to court because of its broadband plans, which the government agency thought were misleading.

"Telecommunications companies must include clear and accurate information for consumers in their advertisements and this should provide a further warning to the telecommunications industry that they must get their advertisements right," ACCC chairman Rod Sims said.

Justice Murphy found that the advertisements represented that consumers could acquire the broadband service for $29.99 per month without acquiring any additional service or paying any additional monthly charge.

In fact, the ADSL2+ plan was $59.99 per month because the ADSL2+ service was only available when purchased with home line rental from TPG at an additional cost of $30 per month.

In his judgment, Justice Murphy stated "it is an unfair trade practice to require consumers to find their way through to the truth past advertising stratagems which have the effect of misleading or being likely to mislead them."

TPG's earlier advertisements were also found to be misleading as they did not disclose the obligation to pay additional up front charges including a $129.95 set up fee and a $20 home phone deposit. These advertisements also did not prominently specify the minimum charge.

This case forms part of the ACCC's ongoing enforcement and compliance campaign to improve the standard of advertising in the telecommunications industry.

A directions hearing will be held on Tuesday 15 November 2011 to set a date for a penalty hearing.