TPG, the broadband and telco service provider was today fined $2M for misleading consumers about the total cost of the Unlimited ADSL2+ package. TPG have spent far more on marketing the service than the fine is worth so it is not a huge hit to them but it is a significant marketing ruling.
In our calculations, a fine of $2M based on the cost of this plan ($69.90 per month for 24 months), means that the fine amounts to TPG paying the total monthly revenue from 1,192 of these customers directly back to the ACCC for 24 months.
Would have been great to see the judge word the verdict like this…
Limited Time Offer! Unlimited ADSL2+ Fine! Pay your fine for just $29.90 per month for 1,192 customers
(plus line rental fine of $40 per month per customer – total min cost $2M).
TPG have since remedied their advertising and you’ll see on many of the buses cruising around Sydney that the offer now reads “Unlimited ADSL for “$69.90″ which now includes the line rental component. It still seems like a pretty good deal and least consumers know exactly what they are up for.
From the smh.com.au
The Federal Court has fined telco TPG $2 million for using fine print to mislead customers about the minimum cost of its broadband service.
The court declared the carrier falsely advertised an ‘‘unlimited ADSL2’’ package for $29.99 a month, when it actually cost consumers an additional $60 a month for line rental, plus an addition ‘‘upfront’’ charge of either $80 or $130 depending on their contract.
The charge relates to an advertising campaign that ran on television, radio, its website, newspapers, magazines, coupon booklets, cinema screens and indoor and outdoor billboards between September 2010 and November 2011. It follows action by the consumer watchdog, who fined the company $13,200 in April for misleading advertising on its website for deals which falsely claimed “500 free VoIP [voice-over-internet-protocol] minutes”.
Read more: http://www.smh.com.au/business/tpg-fined-2-million-for-false-advertising-20120620-20nq5.html#ixzz1yJI7a2ar
The Australian also reported
In his judgment Justice Murphy noted that “the conduct was seriously misleading and affected a diverse class of users and potential users of broadband services”.
The display of the total cost of any plan is now paramount in the marketing of any telecommunications product and contract. We use a bundle price toggle on our comparison site (see below) so that a user can compare between the raw price of the broadband plan and the monthly bundle price if they choose to bundle their home phone. It is important to separate the two as it is possible to have your home phone with one carrier and your broadband with another so a user needs to be able to pick and choose.
Strange how the total cost of a mortgage needs not to be displayed when marketing home loans?
Here’s how we treat the bundling costs of plan on our broadband comparison section where a user can toggle between bundle price and the broadband price. Let us know in the comments if you think that could be improved on…