Optus to compensate 8700 customers for slower-than-advertised NBN speeds

Optus will compensate more than 8700 of its customers who were misled about maximum speeds on certain NBN plans.

The telco advertised a range of speed plans on its NBN services between 1 September 2015 and 30 June 2017, including a “Boost Max” offering which advertised maximum download speeds of up to 100 megabits per second (Mbps) and maximum upload speeds of up to 40 Mbps (100/40 Mbps).

However, due to technical limitations of the NBN’s fibre to the node (FTTN) or fibre to the building (FTTB) connections meant that the speeds advertised were not achieveable.

“Optus is the second major internet provider we have taken action against for selling broadband speeds they could not deliver to their customers,”  Australian Competition and Consumer Commission chairman Rod Sims said.

“Worryingly, many affected Optus FTTN customers could not even receive the maximum speed of a lower-tier plan. This is a concerning trend we have seen throughout the industry and we are working to fix this.”

The issue affected three of Optus’ tiered speed plans, which includes customers on the 50/20 Mbps and 25/5 Mbps plans.

The ACCC said 5430 Optus FTTN consumers on a 100/40 Mbps plan could not receive 100/40 Mbps, and 2337 of those consumers could not receive 50/20 Mbps.

Meanwhile, 1519 consumers on a 50/20 Mbps plan could not receive 50/20 Mbps, while 1381 consumers on a 25/5 Mbps plan could not receive 25/5 Mbps.

“Affected customers should carefully consider the remedies Optus is offering them to assess which best suits their needs,” Sims said.

“In some cases, consumers may consider it preferable to simply exit their contract with a refund rather than accept a service that does not meet their needs.”

The ACCC said Optus admitted that by promoting and offering speed plans that could not be delivered, it likely contravened the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct and making false or misleading representations.

The regulator added that Optus provided a court-enforceable undertaking to the ACCC detailing the remedies it will provide to affected customers, including refunds, moving speed plans, discounted speed plans, and exit from contracts without paying a fee.

Optus will contact affected consumers on or before 2 March 2018 by email or letter.

The court-enforceable undertaking also requires Optus to check within four weeks of connecting a customer to a new NBN speed plan that they are getting the advertised speeds they are paying for.

If it is below the advertised speed, Optus will notify the customer and offer remedies.  

“This undertaking is yet another step towards an industry standard of providing accurate information to consumers about the speeds they can achieve in real-world conditions, and ensuring that consumers get what they pay for,” Sims said.

“We are continuing to investigate other retail service providers selling NBN broadband plans, and will take enforcement action if we consider that they are not delivering on their promises to customers.”

In November, Telstra agreed to compensate 42,000 customers on its NBN services also for advertising misleading maximum speeds.