Aust telcos told not to run misleading ads

Dylan Bushell-Embling
26 Jul 2011
00:00

Australian telecom regulator ACMA wants to prevent the nation's operators from misusing the term “cap” in advertising.

ACMA has published a draft report into the high number of consumer complaints in the Australian telecom sector, attributing the issue partly to bill shock and confusing phone deal information.

The final report won't be released until next month, but the draft recommends prohibiting the use of terms that could be misleading to consumers, The West Australian said, including advertising cap plans where the cap is the minimum and not the maximum spend.

Other potentially misleading practices are promoting services as “free” when costs are recovered elsewhere, or advertising “unlimited” data when there is any form of restriction on usage.

In response to the draft report, industry group Communications Alliance said it would make changes to the voluntary Telecommunications Consumer Protections Code to incorporate the recommendations.

One change will be advertising restrictions such as not using the term cap unless it refers to a hard cap. Others include stronger monitoring and communications guidelines to prevent bill shock, and improvements to complaint handling procedures.

But while the proposed changers also include a new framework for compliance and enforcement procedures, telecom consumer group ACCAN believes changes to a voluntary code are not enough.

ACCAN CEO Teresa Corbin said the proposed altered industry code “cannot possibly provide the fixes the ACMA has demanded surrounding issues such as advertising, customer-nominated spend limits and clear unit pricing information.”

She said operators are not taking seriously the threat of regulation if they do not address the problem on their own.

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