Vocus brands to refund 5,000 customers over NBN speed clams

Vocus Group (ASX:VOC) subsidiaries, Dodo, iPrimus, and M2 Commander have been named as the latest Australian internet providers to provide compensation to customers over National Broadband Network (NBN) services speed claims.

The Australian consumer watchdog said on 23 March that the three companies had undertaken to offer remedies to customers who couldn’t receive the internet speeds they bought because their NBN connection was incapable of delivering it.

“Affected customers will be offered options for remediation, including moving to a lower speed plan with a refund or exiting their plan with a refund and no exit fees,” the Australian Competition and Consumer Commission (ACCC) said in a statement.

The consumer watchdog said that, between 1 October 2015 and 30 June 2017, Dodo, iPrimus and Commander advertised a range of NBN speed plans.

According to the ACCC, however, 3,384 Dodo customers, 1,912 iPrimus customers, and 565 Commander customers were unable to achieve the speeds they were paying for.

“Dodo, iPrimus and Commander have admitted that by offering speed plans that could not be delivered, they likely breached consumer law by engaging in misleading or deceptive conduct and making false or misleading representations,” ACCC Commissioner, Sarah Court, said.  

The consumer watchdog said that Dodo, iPrimus and Commander will contact affected customers by email or letter by late April, to outline the options that customers have.

“Affected customers may prefer to exit their contract with a refund rather than accept a service that does not meet their needs. Dodo, iPrimus and Commander will also be required to tell new customers if they are not getting the maximum speeds advertised to them,” Court said.

Vocus Group consumer chief executive, Sandra de Castro,  stressed that those affected represented a small percentage of the company's NBN customers that had not been capable of achieving the speed of their chosen NBN plan due to "issues with the underlying infrastructure". 

"While it was only approximately [six per cent] of our NBN services in operation, we still view this as too many and we have worked cooperatively with the ACCC to agree on an outcome, including the offer of compensation to these customers," de Castro said. 

"We can only accurately confirm achievable speeds after the connection is completed and we commit to doing so not only to ensure that affected customers receive the necessary information to make an informed decision, but also to ensure a greater level of customer satisfaction," she said.

Just days ago, TPG subsidiaries, Internode and iiNet, also joined the ranks of local telcos to compensate customers for not reaching internet speeds as promised in their NBN contracts with the providers.

A total of 11,000 customers – 8,000 iiNet customers and 3,000 Internode customers – will have the option to choose from moving to a lower tier speed plan with a refund, or exiting their plan without cost and receiving a refund. However, neither iiNet nor Internode has offered a 25/5 plan since 13 December 2017.

The latest customer compensation move brings the total amount of Australian customers to be refunded by their internet service providers to almost 75,000 since the ACCC started investigating providers that had advertised certain speeds for NBN services that they were not delivering.

Telstra and Belong National Broadband Network were the first players to announce compensation after admitting to misleading customers with its maximum speed claims.

Optus followed in December 2017, when it announced it would offer remedies to 8,700 customers over misleading NBN speed claims.

Weeks later, on 20 December, TPG Internet became the third telco in Australia to agree to compensate customers that were misled about maximum speeds they could achieve on certain TPG NBN plans, with up to 8,000 customers affected.

The ACCC revealed plans in July last year to take legal action by the end of 2017 against telcos that are found to have misled consumers over broadband speed claims.

The move to take such cases to court came after ACCC decided to put Australia’s internet service providers (ISPs) in the crosshairs with its program to monitor the country’s broadband speeds and crack down on dodgy speed claims by network resellers.