Telstra has been hit with Federal Court proceedings by the Australian Competition and Consumer Commission (ACCC) over claims it slashed upload speeds in half for select customers without notifying them.
According to the nation’s consumer watchdog, Telstra migrated nearly 9,000 customers on Belong National Broadband Network (NBN) plans with download speeds up to 100Mbps and upload speeds up to 40Mbps down to upload speeds up to 20Mbps without telling them from October to November in 2020.
As a result, the ACCC is seeking declarations, penalties, consumer redress, costs and other orders.
“We allege 8,897 consumers who signed up to a Belong NBN plan between May 2017 and October 2020 were affected by this change and deprived of the opportunity to make an informed decision about their internet service,” ACCC commissioner Liza Carver said.
ARN understands that Telstra determined which of its users to migrate by measuring the amount of data a user consumed and averaged the amount over a five-minute period. The ACCC alleges this may have underestimated peak usage, with increments of 30 seconds being the more commonly used measurement period to determine speed.
The ACCC said Telstra acknowledged this error for roughly 2,500 customers and offered them a one-off $90 credit, but this allegedly leaves over 6,300 who have not been notified.
“In these circumstances, we are seeking a Court order requiring Telstra to pay compensation to consumers who, we allege, did not get the service they signed up for,” Carver said.
In a statement on the matter, the ACCC highlighted Telstra’s general customer terms, which contain a clause that specifies that, if reasonable notice is given, the telco can migrate users to alternative services or pricing plans. According to its terms, if users are not happy about being moved, they can cancel their service and have early termination charges waved.
“We expect a company of Telstra’s size and experience to take their obligations under the Australian Consumer Law very seriously, including those prohibiting misleading or deceptive conduct and false or misleading representations,” Carver added.
In response to the case, a Telstra spokesperson said the telco disagreed with the ACCC's move to initiate proceedings.
"We don’t agree with the ACCC’s views on this issue and look forward to resolving it. When our communications with some of our customers have fallen short, we’ve let them know and made things right," the spokesperson said.
In April 2022, an investigation by the Australian Communications and Media Authority (ACMA) found over 8,000 affected Telstra customers were collectively charged more than $1.2 million for Belong-branded broadband services after they had moved to another telco, with some billed more than once.