TCP code to ban misleading claims in telco ads

The Australian Communications and Media Authority (ACMA) issued a warning that new telco advertising rules will take effect 1 September just before NRL and AFL finals kick off.

Under the Telecommunications Consumer Protections (TCP) code, revised in July by the ACMA, telcos are banned from using terms such as 'cap', 'free', 'unlimited', 'no exceptions', 'no exclusions' and 'no catches' imprecisely. For example, using the term 'cap' to advertise new offers would not be acceptable unless the offer contains a 'hard cap'. Telcos also have to substantiate to the ACMA claims about broadband speed, network coverage and other service attributes.

The ACMA can take enforcement action if a telco fails to comply with the industry voluntary code. It can issue a direction requiring the provider to comply, and if the company doesn’t heed the direction, the agency can take the provider to federal court and seek civil penalties of up to $250,000.

However, the Australian Communications Consumer Action Network has voiced doubts that this will be effective. In a recent letter to Senator Stephen Conroy, Minister of Broadband, Communications and the Digital Economy, ACCAN's CEO, Teresa Corbin, wrote: “The big issue here is that the ACMA does not at present have strong enough powers to enforce the Code.”

Misleading claims in ads by TPG resulted in a $2 million fine after the Australian Competition and Consumer Commission took the broadband provider to the Federal Court. In June, the court found that advertising for the ISP's $29.99 Unlimited ADSL2+ plan was misleading because the offer had to be bundled with phone line rental from TPG.

Only some of the new TCP code rules will come online 1 September, with the rest to be phased in over 24 months. A new industry compliance body, Communications Compliance, opens 1 March 2013. A requirement for standardised charge information takes effect 27 October this year. Total amounts for last two billing periods are to appear on bills and critical information summaries are required starting 1 March 2013. Spend management tools will be phased in starting 1 September 2013.

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