In the latest action in its war on trade practices non-compliance in the telco sector, ACCC has taken Federal Court action against a wholly owned subsidiary of Optus Mobile Pty Ltd.
Prepaid Services Pty Ltd supplies phone cards that are resold by an independent company Boost Tel Pty Ltd.
ACCC alleges that Prepaid and Boost were involved in false advertising.
The allegations
ACCC says that Prepaid and Boost falsely represented that:
- phone cards would provide consumers with a specified amount of call time (when they couldn’t really talk that long for the card price)
- only timed call charges would apply (when in fact other fees were charged)
- a rate per minute for calls would apply regardless of the number / length of calls made (when in fact that call rate is highly unlikely to be achieved in practice).
What ACCC wants
In court, ACCC is seeking orders for:
- declarations that Prepaid’s and Boost’s conduct breached the Trade Practices Act
- injunctive relief preventing repeat breaches
- corrective advertising
- community service orders
- costs of the proceeding.
What next
The case is filed in the Federal Court’s ‘fast track’ list. The first court scheduling conference is due in Perth on 14 September 2009.
Our take on it
It’s a court case. ACCC has allegations and the other parties are entitled to debate them.
But ACCC takes careful aim in these situations. Don’t be surprised if this one comes to a head quickly.
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I tried a $10 Dodo phone card Nov ’08. The card was misrepresented on the Dodo website. Each time I called there was a connection fee, but no mention of a connection fee on Dodo’s rates list or elsewhere. Calls dropped out after a couple of minutes and I had to redial a number of times (with more connection fees). Quality of the connection was very poor. Dodo also advertised online account access to monitor call usage and to top up, but this service was not available.