ACCC lodges appeal over TPG prepayment ruling

The Australian Competition and Consumer Commission has filed an appeal over a Federal Court decision handed down in October that dismissed ACCC claims that TPG engaged in misleading conduct.

The ACCC in December 2018 dragged TPG to court, accusing the telco of misleading consumers. At issue was a $20 ‘prepayment’ fee that TPG customers had to pay when signing up to a phone plan.

The purpose of the fee was to cover charges not included in a TPG customer’s phone plan, such as calls to overseas numbers. The ACCC said that it acted as a non-refundable fee, however, with TPG keeping at least $10 when a service was cancelled. TPG would top up the prepayment fee if its balance fell to $10 or less.

Justice O’Callaghan, who presided over the original case, found that a “reasonable or ordinary consumer of telecommunication services” would have understood that they would forfeit $10 to $20 when they cancelled their TPG phone service.

“I also do not accept that a customer receives nothing for making the prepayment,” Justice O’Callaghan’s ruling also stated, noting the ACCC’s contention that “there is a significant imbalance in rights between and obligations as between TPG and its customers because TPG’s customers are required to make a payment for which they receive nothing.”

“We are appealing from this decision because we believe the court made an error in deciding that TPG’s representations about this mandatory prepayment were not false or misleading,” Rod Sims said in a statement released today by the ACCC

“Consumer awareness of important terms should not be expected where they are contained in the fine print of a long and detailed contract or, in the case of online contracts, after multiple clicks.”

“We remain concerned that TPG misled its prepaid customers about their ability to use up their full prepayment and to obtain a refund of any unused funds when they ended their contract,” Sims said.

The ACCC said it was not appealing Justice O’Callaghan’s ruling that the prepayment was not an unfair contract term.