Telstra Fined $102,000 Over Dodgy iPhone 6 Ad [Updated]

The Australian Competition and Consumer Commission (ACCC) has rapped Telstra over the knuckles to the tune of $102,000 today, following the placement of misleading ad for the iPhone 6.

The ad was for Telstra's iPhone 6 on the one of the carrier's Mobile Accelerate plan, displayed in The Age. The ad prominently featured a price of $70 per month for the device and plan, when actually the plan featured a mobile repayment option of $11 per month, taking the total price up to $81 per month. Telstra disclosed the MRO, but only in the fine print, below the banner price of $70.

The ACCC has issued an infringement notice to Telstra, saying that the telco misrepresented the price of the bundle to its customers via the ad.

ACCC Chairman, Rod Sims, said in a statement:

Businesses must be careful about using attention grabbing headline prices to ensure that their advertisements do not mislead consumers about the actual price they will have to pay. This is especially the case for bundled goods and services like phones and plans.

The ad means that Telstra is going to be $102,000 poorer this Christmas.

Update: Telstra has responded to the fine notice, saying it was "surprised" to receive the infringement notice.

We were surprised to receive the infringement notice, as our ads prominently stated the mobile plan cost, the handset cost and the total minimum cost as legally required, and were in line with the way many others in the industry advertise mobile plans with handsets. The ad in question was displayed in a full newspaper page so all the text was much larger.
Even though we are strongly of the view our ads complied with the law, we have paid the notice. In addition, we’ve made some changes to our advertising to make it even clearer to customers what they will pay each month for a plan and handset. We now consider this matter closed.
We think there is scope for these sorts of issues to be resolved in the future through constructive engagement between industry and the regulator, rather than through the use of formal enforcement mechanisms.

[ACCC]


Comments

    And yet again they will learn absolutely nothing from the experience.

    Last edited 16/12/14 10:31 am

      Wrong, I have now learnt where the ACCC lives, in Telstra's pocket.

      "and were in line with the way many others in the industry advertise mobile plans with handsets."

      Basically, they're using Monkey see Monkey do as a valid excuse.

    and how many minutes do you think it takes a company like Telstra to earn $100K.

    P.S. What is the bet it will probably be classified as a draw-down business expense an claimed as a tax write-off.

      aaah i think 134.040611 seconds ..... based on profit only .... i have no idea what the turnover last year was ..

    387 fooled customers paying $11 extra for 24 months = $102,168, every 388+ fooled customer is a profit.

      Beat me to it!

      This will be an ant bite for them and not much more. Still not sure how Telstra can get away with the prices it charges... I was gobsmacked when they tried to resell the Nexus 5 for over $800.

        dunno where you are getting that logic from....

        11$ per month for an iphone 6 that retails for 864$...so telstra subsidises the cost of the phone by $600, which is a loss in itself, your logic is flawed....i know for a fact that iphones are sold to stores for roughly 18$ less than retail...

        as for the nexus clearly google didnt sell the phones to Telstra for the same price that they are able to manufacture and sell them themselves...

        Last edited 16/12/14 3:27 pm

      Exactly how do you get fooled. You need to sign a contract which clearly states all the payments required i.e $70/month for the plan, $11/month for the phone etc....

      I fail to see the issue here. They advertised with small print exactly the same as every other company in the world does.

    Why just this ad? All of their plans are listed this way.
    Granted, when you're looking on their webpage, the total cost of the plan is shown and does update when you select different phones.

      It must be the plan one of ACCC's executives been fooled by. Who cares about other plans and other people...

    I love it how some people think that 102,000 is a lot of money to Telstra.

    For a company that earns billions in profit, that's not even 1% of the profit margin. They wouldn't even blink at this "fine".

    Fine them 102 million. Then we're talking!

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