Dodo forced to pay a cool $360K to 16,000 customers after claiming its NBN plans were 'perfect for streaming' – but you could only stream 2 or 3 movies

Dodo/ Facebook.Dodo is refunding $360,000 after falsely claiming some of its NBN plans were ‘perfect for streaming’.
  • Internet provider Dodo has agreed to refund $360,000 to around 16,000 customers after charging them excess fees.
  • Competition watchdog the ACCC found Dodo falsely claimed some of its NBN plans were “perfect for streaming” when they only included 10GB per month.
  • ACCC chair Rod Sims referenced Netflix high definition usage of up to 3GB of data per hour and said with Dodo’s plans, a customer would have to pay extra if they streamed just two or three movies.

Are Dodo’s NBN plans “perfect for streaming” as the internet provider claimed they were? Not according to the competition watchdog.

The ACCC will force Dodo to refund customers $360,000 after finding that some of its advertising claims around NBN broadband plans were false.

Between November 2015 and March 2018, Dodo had advertised its NBN broadband plans as “perfect for streaming”, including plans with speeds of up to 12 megabits per second (Mbps). And some of these plans only had 10 gigabytes of data which, if exceeded, would mean customers would have to pay extra fees.

The ACCC found with only 10GB a month, Dodo customers would use up their allotted data after very little streaming.

“We were concerned that Dodo customers on these plans could not reliably stream high quality video, particularly when others in the household were using the internet at the same time,” ACCC chair Rod Sims said in a statement.

“According to Netflix, high definition streaming uses up to 3GB of data per hour. With these plans a customer would have to pay extra if they streamed just two or three movies.

“We don’t believe NBN plans with just 10GB of included data are ‘perfect for streaming’.”

Sims added that at 12Mbps, Dodo’s customers couldn’t stream ultra HD video at all.

Netflix recommends internet speeds of 5Mbps for HD quality of streaming and 25Mbps for Ultra HD.

“It is simply unacceptable for an internet service provider to tell consumers that their services are ‘perfect’ for a particular use, and to then charge them extra when they use the service as advertised,” Sims said.

The ACCC said Dodo’s advertising “was likely to be false or misleading” and in breach Australian Consumer Law.

Dodo has agreed to give refunds to around 16,000 current and former customers who were hit with excess data charges during that advertising period.

Dodo has said less than 3% of its customers exceeded the plan, with the excess charges coming to about $23 per customers, according to an email Business Insider Australia received from Vocus.

“Dodo will offer credits and refunds of the excess usage charges, and where applicable waive any exit fees to current customers,” Vocus said.

But if you are still with Dodo and think you are subject to excess data charges, you’ll be allowed to exit from your contract at no cost.

Antony de Jong, chief executive, business and consumer, at Dodo’s parent company Vocus, apologised for the incident and said affected customers will be contacted as soon as possible.

“Doing the right thing by our customers is our focus and we apologise for our error,” he said in an email. “We want the Dodo brand to stand for simplicity and fairness and endeavour to reflect these values in all customer interactions. Our team will contact impacted current and former customers as soon as possible. Further, we ceased new sales of that specific NBN plan and promotion some time ago, turning our focus to offers that deliver a better experience.”

In January 2019, Dodo was ranked as having one of the slowest internet speeds in Netflix’s speed index.

Vocus split into three businesses earlier this month after it failed to get acquired by either energy provider AGL or investment firm EQT Infrastructure, AAP reported. Vocus had lost nearly a third of its value in June after AGL Energy withdrew its $3.02 billion takeover bid.

The three businesses included Vocus Network Services – for fibre and network solutions, Vocus Retail – which handles its Dodo, iPrimus and Commander brands and a stand-alone Vocus New Zealand business, ARN reported.

Dodo was founded by rich-lister, property developer and owner of Australia’s National Basketball League, Larry Kestelman. He sold the company to M2 Telecommunications for $203.9 million in 2013.

In 2018, Dodo ditched its 17-year old cartoon dodo bird, in favour of a more realistic CGI version, Mumbrella reported. During its revamped ad campaign with the new bird, Dodo said it “was not as stupid as we look.”

The ACCC may not agree.

Business Insider Australia has contacted Vocus for comment.

UPDATED 2:55pm 12/7/19: This article was amended to include comments from Vocus.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.