Optus and TPG have issued collective refunds worth more than $6.5 million after both providers did not inform tens of thousands of customers that they could not deliver the maximum internet speed advertised in their internet plan.
The Australian Communications and Media Authority (ACMA) said under current rules, telcos must verify maximum internet speeds when migrating customers to the NBN and notify them when speeds cannot meet those that were originally advertised to them.
In July 2021, Optus self-reported that over a two-year period it had failed to inform 34,000 customers and had issued $4.4 million worth of refunds as a result.
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In October 2021, TPG said it had failed to inform 4,400 customers, and had paid $2.1 million as a result.
ACMA Chair Nerida O'Loughlin said consumers are entitled to receive exactly what they paid for.
"Optus and TPG were charging these people for internet speeds they could not get," Ms O'Loughlin said.
"These customers were left in the dark and denied the option to move to a cheaper contract or walk away."
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Both telcos are required to commission an independent audit of their compliance systems and implement processes to stop the practice occurring again in the future.
Ms O'Loughlin said the penalties should serve as a warning to all internet providers that the speeds they deliver must match those they advertise.
"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," she said.
In June 2021, the ACMA issued Telstra with a remedial direction for similar issues.
