TPG Cops $2 Million Fine Over Misleading Ads

A Federal Court judge has decided that TPG should pay a whopping $2 million in penalties for failing to specify that the company's $29.99 Unlimited ADSL2+ deal needed a bundled $30 home phone plan in its ads, but it's not something the ISP is going to take laying down.

TPG was offering an unlimited ADSL2+ broadband deal, but the offer only applied when a customer took a $30 home phone plan with the ISP. The ACCC turned its nose up at TPG in December 2010, throwing the book at the ISP for the potentially misleading offer. TPG was found to be at fault in November and the Federal Court has now handed down a $2 million fine.

The judge presiding over the case, Justice Murphy, said in the judgement that such a high penalty was needed to discourage similar behaviour by ISPs in future.

Needless to say, the ACCC is pretty pleased with itself. Said ACCC Chairman, Rod Sims in a statement:

This decision should send a strong warning to telecommunications and internet providers that they cannot continue to take risks in their advertising or they could end up in court and be exposed to substantial penalties.

The ACCC is committed to taking a hard line to secure a culture of compliance by telecommunications providers and improve marketing in the telecommunications industry. The ACCC will continue to take court action in order to achieve this.

While this whole case has been going on, TPG has also copped a $13,200 fine for not disclosing all the fine print around its "free" VOIP minutes offer, while Optus, Foxtel and Dodo have also been hit with their own fines for varying infringements.

The ACCC might not want to crack the champagne yet, however, as TPG has told Gizmodo Australia that its preparing to appeal the decision.

TPG said today that it's "disappointed at the penalty judgment of the Federal Court concerning the advertising of TPG’s unlimited broadband with home phone plans," adding that "it has given instructions to appeal both the original findings of the Court as to liability and the decisions about penalty".

Does this change your view of the ISP you rated as your favourite in 2011?


Comments

    Its a bit rich given that unless you have naked ADSL you would've been paying the line rental to someone. Why do the courts think its fair/right/appropriate to very heavily fine one entity as a deterrent to other entities?

      Because they were the ones not saying *plus phone line rental.
      I absolutely agree with this, the less fine print the better.

    I use tpg and think they're great. Accc works in the interests of ever consumer, so good on them too

    I disagree with the penalty, when you compare it to the optus finding against their advertising a service which decreased in speed after hitting your cap. In the optus case you could sign up and not know this would happen. With this TPG deal you couldn't sign up for anything without paying the full amount. Yeah TPG have their downside but why should they pay more when they could not actually rip anyone off.

      i absolutely that optus was deserved worse. i don't disagree with the penalty though. one thing that has happened over the years with Apple V Samsung for example, rather than swing the massive appendage of the law at companies who don't correctly license patents and snuff out dodgy patents, it's cheaper and easier just to patent anything and everything you can and to bypass licensing and wait for the patent holder to take you to court. this provides incentive for companies to do the wrong thing and then front court, plead ignorance and take their wrist slap. 2 Million is proper money but if it were less, TPG would have clearly profited from their little "accident".

    The 'Bundle' is extremely clear on both the TV and Web advertising - even going through the application it's abundantly clear it's a requirement to have the home line with TPG too. I'm sure it's just a few really thick people / or totally non tech savvy people who couldn't read that got confused.

    TPG are still the best IMHO. The ACCC is doing it's job, but we really are a 'nanny state' these days.

      This comment has been deemed inappropriate and has been deleted.

      You have a copy of the Adds from 2010? These are the adds that this story is about after all. The adds that you see today are irelevant.

        +1. I clearly remember going for this deal back in 2010 and did not go through with it 'cos of the home phone line thing. You know 'cos i'm a tight ass.

          +1

          I remember doing a double take, and then later finding out about the phone bundle. Regardless of the fact that you can find out later, the whole "double take" effect in this context is essentially misleading advertising.

          FREE SEX*

          *With your own wife, if she feels up for it

      It's clear NOW, thanks to them cleaning up their act.

      The ads said get this product for 29.95 when infact it cost 59.95. I don't understand how you think that is clear? It may be obvious to the average Gizmodo reader, but not the average australian. The ACCC is their to protect everyone from these cowboy practices and I for one think its good that they are cracking down on these stupid claims. Telstra was just as bad with their 9.95 internet rate, when it turned out you had to be a Telstra customer and not currently have or previously had any internet on your account. Just as misleading.

    This is insane, TPG is doing great job to bring the best of the competition in Australia and rather than encouraging them in doing so they are actually penalising them? The advertisement doesn't sound that misleading to me, its written clearly that you'd have to sign up for a land-line connection to get that deal. The judge might be stake holder in Telstra that why he gave them that harsh punishment!!

      Adverts from 2010 didn't state the phone line cost. That's what it is over. Not the current ads.

    TPG was great till I had to move this month.. then I switched to iiNet because it was cheaper than paying their overpriced change of residence fee. In the end, I believe I will have a more stable and reliable connection.. something I've been considering for a while anyway.. but didn't due to feelings of loyalty to the company. The $130 change of residence fee was something that didn't make me feel valued..

    As for this.. nah it doesn't really change anything for me. They still are the best ISP if you want cheap internet... just that it's become junky

      If it's outside contract just cancel your connection and start a new one in the new place.

      You're generally going to pay $100 for connecting with anyone anyway, it does cost them money to connect you up (telstra charges them the majority of that fee) It only is an issue if you rent and have to move every now and again (or every 6months-1year for me) but you get used to it.

    TPG changed their advertising to make it clear it was a bundle when the complaint was made, originally they did only really show the $29 unlimited as a stand alone, that said, my previous comment stands.

    2 million is peanuts to these companies, this is not a penalty it's just a fee for being able to advertise themselves as the cheapest intenet provider.

    2 million isnt peanuts, remember profit pays for investment and profit rarely makes up more then 30% of recenue, so TPG would need to generate approx 7 million in revenue to pay that fine. When you charge $50 for a service it would take approx 12,000 connections to pay for that.

      But don't you reckon those $29.99 ads helped them get 50,000 connections.

    Good on the ACCC. I have had my experience with TPG. I signed up for a mobile service, I was diligent and read all of the T&Cs I found find, the upfront fees were a bit high which was not clear until you actually sign up ($20 for the SIM, plus $20 deposit, plus upfront for the service) but no matter I decided go ahead anyway.

    When I started using it, I found out from my usage that my usage did not include 13 & 1300 numbers and I was being slugged in exorbitent amount (over $1.10 per minute if I recall correctly) so a 10 minute phone call cost $11.00 in REAL money (not $11 of "Funny money" used to inflate the perceived value of a Cap plan) which is utterly ridiculous for a common call type , and is not uncommon for businesses who use 13/1300 numbers to keep you on the phone for at least that long.

    Even to call TPG themselves for anything, they only provided a 13/1300 number and was not a special call type for themselves. When I did call up to ask them where it said that these calls are not included, they directed me to their website which was at least 3 levels deep and said that "it was clearly shown" (3 levels deep having to click on images that are not obvious are even hyperlinks is not clear). In their end I complained hard, got nowhere with them until I went to the TIO, and I got all my money back including the exorbitant SIM card fee and a refund for the 13 calls plus made them pay for all the calls that dropped out.

    Even if you go to the TPG website now, you can see that the T&Cs are more clear, but the T&Cs are still fully of "Gotchas", it is like a minefield. Everything they quote is 'This + This + This + This plus that with this discount if you stand on your head but not if you do that and does not include this'. Soon you will see them separating the costs by each upstream provider they use.

    I want TPG to continue , we need a low cost provider that people can bog down with their torrents so it these people don't bog other networks down, but they should just simplify the costs a bit. We don't need to know the component cost of every item if the component is not optional. For me, it is just too much of a risk that I am not going to fall foul of one of their obscure rules.

      +1 to Simon2 had a very similar experience with TPG. I consider myself a tech savvy person, but it should not require a law degree to choose a service provider that is right for you. The whole process should be easier for all consumers (which are a diverse bunch, many have little technical knowledge). Thank you ACCC for protecting consumers interests.

    I don't see a problem with the wording of the TPG ad.

    TPG does provide unlimited broadband for $29.95 per month. The fact that a bundled home phone is required does NOT change that the fact that the underlying ADSL2+ service being advertised is still $29.95 per month for unlimited.

      Wrong. If TPG advertise a product at $29.95 and THAT product is not at the price then it is illegal (clearly according to the Court). The ad suggested that this was the only cost involved, it is a breach of the law to have hidden costs. While the penalty may be high, at the end of the day there is 0 disputing that it is a clear cut case of misleading or deceptive conduct by TPG.

    TPG is rubbish, their service is average at best, prices are cheap, I guess if you want No Frills internet then go TPG, but if you want a product worth enjoying iiNet or Internode are easily top

      I use TPG, 700kb/sec download all the time and unlimited usage, seems pretty good to me.

      I had iiNet at my last place and the speed was the same but I got a heap of drop outs and only a 80gb cap for the same money. Been with TPG for 6 months now and it has NEVER dropped out.

        I personally use TPG and have only had few issues (related to underwater sea cabling) however my friends (two of them I have suggested go on it) have had nothing but troubles and its funny becuase one of them is on the exact same DSLAM as I am so I think it might just be his internal house wiring.

    a mate of mine said that in his language the abbreviation of TPG is sh*t with sugar

    well his comments is spot on actually
    lol

      LOL!!!

    They get the fine, consumer pays the price. TPG has given me excellent service, reliable connections, and cheap phone and internet. Hope this "fine" doesn't affect the above fields.

    It started with Digisurf which was extremely cheap but when you signed up they every month tried a new trick to overcharge. It was fighting without end. Then Digisurf went broke and were bought by Soul. The customers were ring-fenced, no way to get out of the old contract. Soul went on trying to increase their income by overcharging. They went broke too and TPG took the inheritance but gave a once in a lifetime chance to get out of the contract which I used on the spot. So I don't know what is happening now but I guess it is still a good idea to check the monthly statement very thoroughly - they took over this two trickster companies and the advertising situation shows clearly that they did not make the move to more honesty.

Join the discussion!

Trending Stories Right Now