In a statement announcing that it had begun proceedings in the Federal Court, the ACCC expressed concerns that customers had been forced into making a $20 “prepayment” to cover costs not included in their plans.
It said that TPG had, from March 2013, stated this money could be used for excluded services before a plan was cancelled. However, the ACCC is alleging this was not a prepayment, but rather a non-refundable fee, of which the telco retains “at least $10” on cancellation of a plan.
Furthermore, it alleged that TPG’s process automatically tops up the prepayment whenever a customer’s balance falls to $10 or less, meaning they are unable to use the remaining $10 for services — a point the regulator said is not disclosed to customers.
“A reasonable consumer would expect that this $20 payment would be refunded if it was not used, but in fact it is non-refundable. It is unacceptable that TPG only disclose this forfeiture in fine print,” said ACCC deputy chair Delia Rickard.
“Since March 2013, the ACCC estimates that TPG is likely to have retained millions of dollars paid by consumers in prepayments that were forfeited.”
Under the legal action, the ACCC is seeking compensation for TPG customers as well as penalties against the telco.
TPG told My Business it will actively defend its plans and advertising.
In a statement, the company said: “TPG notes the ACCC’s media release today as to instituting proceedings in the Federal Court of Australia against TPG Internet Pty Ltd. TPG is yet to receive court sealed documents in respect of the announced proceedings.
“TPG firmly believes that its plan terms and advertising are neither misleading nor unfair and looks forward to dealing with these important issues through the court process.”
Earlier this year, Telstra was fined $10 million and had to refund a further $9.3 million to around 72,000 customers after admitting to misleading customers about its Premium Direct Billing service.