TPG caught in the ACCC firing line for misleading customers

The ACCC is seeking compensation for TPG Internet customers that have been caught up in its misleading conduct in relation to unfair prepayment consumer contract terms. 

The ACCC has began proceedings in the Federal Court against TPG Internet, alleging that the telco’s representations to customers about the forfeiture and automatic 'top-up' function were misleading and saw TPG potentially “retain millions of dollars”.

As customers signed up to a TPG plan, they were required to make a $20 'prepayment' to cover costs that may be incurred, but are not included in their plan such as overseas phone calls, or calls to 1300 numbers that may not be included.

Since March 2013, TPG's website represented that a prepayment of $20 could be used for excluded telecommunications services before the consumer cancelled their plan.

But according to the ACCC, the 'prepayment' operated as a non-refundable fee with TPG retaining at least $10 of the prepayment when a customer cancels their plan.

"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," ACCC deputy chair Delia Rickard said.

"Since March 2013, the ACCC estimates that TPG is likely to have retained millions of dollars paid by consumers in prepayments that were forfeited."

Additionally, when a customer's prepaid balance falls to $10 or lower, it was automatically topped-up by a direct debit to return customer's prepayment balance to $20.

This meant that customers can't use at least $10 of the prepayment for telecommunications services when they cancel their plan, which is not disclosed.

In addition, this has led to ACCC's allegations that TPG's standard contract terms requiring forfeiture of the prepayment is unfair under the Australian Consumer Law (ACL) and is currently seeking penalties and compensation for consumers.

"We have and will continue to take action to hold telcos to account for failing to comply with the Australian Consumer Law,” Rickard added.