The real meaning of an 'unlimited' mobile data plan

William West/AFP/Getty Images
  • The ACCC is cracking down on telcos promising “unlimited” mobile data plans.
  • The consumer watchdog says so-called unlimited plans had speed caps imposed on particular uses or after a certain data threshold was reached.
  • The ACCC now has a suite of hefty fines to deploy for misleading advertising.

Unlimited usually doesn’t mean unlimited when it comes to mobile data plans.

And this hasn’t gone unnoticed by the consumer watchdog, the ACCC.

The telcos have been put on notice to ensure their advertising is clear and transparent or face fines running into millions of dollars.

The ACCC has also warned it may bring proceedings against executives who knowingly approve misleading advertisements.

Many telcos have shown they have trouble understanding that using the word “unlimited” means they are promising a never ending supply of mobile data.

Earlier this year the ACCC began investigating Optus, Vodafone and Telstra’s use of the term unlimited to promote mobile data plans.

Optus, Vodafone and Telstra advertised between March and June this year mobile data plans with a headline claim of “unlimited” mobile data.

However, these so-called unlimited plans had speed caps imposed on particular uses or after a certain data threshold was reached.

The Optus unlimited plan imposed a 1.5Mbps speed restriction on tethering, streaming and downloads. Heavy data users could also be deprioritised during congestion.

The Vodafone unlimited plan had an initial data allowance at usual speeds, after which all usage was speed capped at 1.5Mbps.

Telstra’s plans provided 40GB at usual speeds, after which all usage was slowed to 1.5Mbps and slowed further during busy periods.’

The ACCC says the headline claims were qualified with disclaimers that were not sufficiently prominent or clear to explain to consumers the existence and impacts of the limitations.

All three stopped using the headline claim of “unlimited” following action by the ACCC.

“Telecommunications companies should be wary of using absolute claims like ‘unlimited’ where that does not give a true picture to consumers of what is being offered,” says ACCC Chair Rod Sims.

“We have taken a range of actions against telecommunication companies for misleading consumers. It is about time they showed more respect for their customers and the Australian Consumer Law.”

Penalties increased on September 1 to the greater of $10 million, three times the value of the benefit received, or where the benefit cannot be calculated, 10% of the annual turnover in the preceding 12 months.

Penalties against individuals increased to $500,000, more than double the previous $220,000.

The ACCC has recently taken action for misleading and deceptive conduct in relation to NBN broadband speed claims by Telstra, Optus and iiNet and Internode.

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