TPG advertisement flouts advertising laws

A mobile with unlimited calls and texts for just $59.99 a month !  What a bargain !  Where do we sign ?

This is exactly the offer being made on TPG’s home page this week.  And why wouldn’t such a great deal be the most prominent thing on their site ?

Problem is that the advert is misleading and deceptive and breaches section 52 of Australia’s Trade Practices Act 1974.

What section 52 says

Section 52 is the cornerstone of Australia’s consumer protection laws.  A corporation must not engage in conduct that is, or is likely to be, misleading or deceptive.

What the TPG advertisement says

There are no qualifications, no footnotes, no asterisks pointing to disclaimers, no small print.  If you go digging on the TPG site, you may notice disconnected small print on another page that seems to say that the front page deal is qualified by a Fair Go policy.  But the deal certainly gives no clue about that.

ACCC’s views

ACCC has consistently maintained that section 52 demands that:

• Any qualifications to words like ‘free’ or ‘unlimited’ must be clear, immediate and prominent. In other words, virtually as soon as you read ‘unlimited’ you should also be informed that there is a limitation.
• You can’t use small print that contradicts the ‘main message’ of an advertisement. You can’t have a big headline ‘Free!!!’ and small print that says (in effect) ‘Only joking.’

Verdict on the TPG advert

It plainly breaches section 52 of the TPA.  Either that or the Fair Go policy is not enforceable.  Customers can insist on their unlimited usage rights.

It gets worse … the Fair Go policy breaches Victorian State law

Part 2B of Victoria’s Fair Trading Act bans unfair contract terms.  And one class of terms that the regulator Consumer Affairs Victoria considers very unfair is contracts and policies that effectively say: ‘The contract is whatever we say it is from time to time.’

Here’s a key passage from TPG’s Fair Go policy:

THE FAIR GO POLICY

The Fair Go Policy applies to all promotions and services and may extend to future promotions and services as determined by us from time to time. The policy allows us to request that excessive users of a promotion or service limit their use or cease using a promotion or service.

We reserve the right to determine what is excessive use and may suspend or cancel a customer’s access without notice in such circumstances. We also reserve the right to charge customers for promotions or services accessed in excess of the Fair Go Policy.

Please note that our right to suspend or cancel the service without notice to you under this clause overrides any requirement we may have to give you notice in other parts of the agreement, for example under the Standard Agreement (as applicable to you).

That’s pretty clearly in breach of Victoria’s unfair contract terms law.  You just can’t say:  ‘The rules are whatever we say the rules are.’

Everyone knows that’s unfair.  When Telstra does it to CSPs in a wholesaling arrangement, CSPs say: ‘That’s unfair !’  Well, same rule applies in retail contracts – except that it’s given legal force by the Fair Trading Act in Victoria.

So how do you impose a ‘reasonable use’ policy legally ?

You have to make it clear that it applies, in the first place.

The policy must be specific.  It must tell the customer quite clearly what’s allowed and what’s not.

If there is a right to change it, the right must be restricted to cases where there is some powerful reason to justify it, and it must be as non-arbitrary as possible.

And if you do change the usage rules, you must offer affected customers the right to cancel contracts without penalty.