Optus and TPG refund $6.5 million to customers after under-delivering on internet speeds

Two major telecommunications companies will refund nearly 40,000 customers after charging them for internet speeds that weren’t being delivered.

Optus and TPG have refunded their customers more than $4.4 million and $2.1 million respectively after failing to suitably notify tens of thousands of customers that the maximum speeds advertised could not be met on the NBN infrastructure available.

The telcos self-reported their errors to the communications watchdog, the Australian Communications and Media Authority (ACMA), in 2021.

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Under the watchdog’s rules, telcos must verify maximum internet speeds when swapping customers to the NBN and let them know if the speeds cannot meet what was originally advertised.

Optus has been forced to refund 34,000 customers.
Optus has been forced to refund 34,000 customers. Credit: LUIS ASCUI/AAP

Around 34,000 Optus customers over a two-year period did not receive the level of service they had purchased and 4400 TPG customers were affected by the same issue.

Optus has contacted impacted customers and offered them the applicable remedies, including more than $4.4 million in refunds.

As of December 2021, TPG had refunded more than $2.1 million to customers as part of its remediation program.

ACMA Chair Nerida O’Loughlin said when telcos were unable to deliver promised speeds, customers were entitled to move to a cheaper, lower-speed plan or exit the contract at no cost.

“Optus and TPG were charging these people for internet speeds they could not get,” she said.

Optus and TPG must now conduct independent audits into their compliance systems. File image.
Optus and TPG must now conduct independent audits into their compliance systems. File image. Credit: AAP

“These customers were left in the dark and denied the option to move to a cheaper contract or walk away.”

Optus and TPG must now conduct independent audits into their compliance systems.

The watchdog required Telstra to conduct an audit in 2021 for similar issues.

“The scale of service failure by these companies is significant.

“Our actions will ensure the top three telcos are more vigilant delivering the internet service their customers expect and have paid for,” Ms O’Loughlin said.

‘Downgrade or get out’

Finder research found the majority of broadband customers (54 per cent) or an estimated 8.2 million people had experienced an internet drop-out in the past 12 months, however, just one in 10 had switched their broadband plan in the past six months.

Finder expert Angus Kidman said every consumer “deserves to get what they’re paying for”.

“Unreliable internet connections slow down productivity and ruin our downtime too,” he said.

“If you’re experiencing regular drop-outs, call your broadband provider immediately. If they’re not offering the minimum speeds promised on your plan, it’s time to downgrade or get out.

“If you’ve been on the same deal for a while, it’s always worth shopping around for a faster, better plan.”

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