Telco companies agree to stop misleading advertising

Australia’s three biggest telephone companies have reached an agreement with the ACCC to end misleading advertising practices such as the failure to disclose fees and the use of misleading terms such as “free” and “no exceptions”.

The agreement by Telstra, Vodafone Hutchison (including the Vodafone, 3 and Crazy John’s brands) and Optus (including Virgin Mobile) follows a campaign to clean up the industry launched by the consumer watchdog earlier this year.

It includes court-enforceable undertakings on the 12 most prevalent types of misleading conduct undertaken by telecommunications companies, ACCC Chairman Graeme Samuel says.

“The broader telecommunications industry has for some time walked a fine line between compliant and non-compliant advertising. The ACCC welcomes the cooperation of the three major carriers in clearly articulating what is fair to consumers and what is not, and their commitment to the basic principle of truth in advertising,” Samuel says.

Telcos will no longer be able to headline price offers in the form of “price per minute” for mobile phones and phone cards when there are other fees or charges which are not clearly disclosed.

They will also be barred from making claims on price, data allowances, total time allowances, speeds and network coverage where the claims cannot generally be sustained for all consumers.

In addition, there will be no more use of advertising terms such as “unlimited”, “no catches” and “no exceptions”, when this is not the case.

Samuel told The Australian that the departure of former Telstra chief executive Sol Trujillo had played an important role in getting all three carriers on board with the agreement.

“Telstra’s attitude was totally different to that which would have applied before [new chief executive] David Thodey took over,” he says.

The ACCC will now contact remaining telco operators to encourage them to join the agreement, Samuel says.

Together, Telstra, Optus and Vodafone Hutchison comprise almost 90% of the Australian telecommunication goods and services market.