ACCC takes on TPG for retaining millions from allegedly misleading conduct

ACCC takes on TPG for retaining millions from allegedly misleading conduct

The Australian Competition and Consumer Commission (ACCC) is hoping to secure compensation for TPG customers after the telco allegedly misled consumers about a "prepayment" fee.

The ACCC alleges that TPG misled customers about a $20 "prepayment" made by consumers and that the telco included unfair prepayment contract terms in some plans.

TPG is facing penalties from the watchdog, and may be forced to refund customers potentially millions of dollars if it is found to have misled them.

The situation revolves around a $20 "prepayment" that customers had to pay when signing up to a TPG plan which was intended to cover costs that might be incurred but are not included in their plan, such as overseas phone calls.

However, as found by the ACCC, the prepayment operates as a non-refundable fee and TPG retains at least $10 of the prepayment when a customer cancels their plan.

ACCC deputy chair Delia Rickard says consumers would expect to receive the full $20 back if they did not use functions not included in 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," says Rickard.

"It is unacceptable that TPG only disclose this forfeiture in fine print."

In addition, TPG's terms mean that when a customer's prepaid balance falls to $10 or lower, TPG automatically 'tops-up' the prepayment by a direct debit from the customer to return their prepayment balance to $20. This means that customers can't use at least $10 of the prepayment for telecommunications services when they cancel their plan, which is not disclosed.

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

The ACCC is seeking penalties and compensation for consumers.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Get our daily business news

Sign up to our free email news updates.

 
Whitefox Recruitment founder Luke Hemmings making strides as a careers leader
Partner Content
After relocating his Canberra-founded company Whitefox Recruitment to the Gold Coast la...
Whitefox Recruitment
Advertisement

Related Stories

ASIC secures its first court win for greenwashing against US giant Vanguard

ASIC secures its first court win for greenwashing against US giant Vanguard

The Australian corporate watchdog has caught out one of the world&r...

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Australian-founded medicinal cannabis company Althea Group (ASX: AG...

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Listed funds manager 360 Capital Group (ASX: TGP) has offloaded its...

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Australian development giant Lendlease Group (ASX: LLC) has been gr...