ACCC to appeal court loss to TPG over misleading consumer allegations

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The Australian Competition and Consumer Commission (ACCC) said on Friday it will appeal its October Federal Court defeat against TPG and appeal the decision to the Full Federal Court.

The case involved a AU$20 prepayment by customers to cover services not included in their plans, such as overseas phone calls.

When the balance fell below AU$10, TPG would automatically top up the balance from the customer bank account or credit card, or if the customer left TPG, the balance was forfeited. The ACCC has alleged that TPG made misleading representations about the payment since March 2013.

“We alleged that by representing this was a ‘prepayment’, consumers were misled by TPG into thinking they could use all the money they had prepaid for out-of-plan services, when this was not usually possible,” ACCC Chair Rod Sims said.

In his October judgment, Justice O’Callaghan said the case hung on whether the use of the word “prepayment” was misleading or deceptive, and whether the forfeiting of the unused balance to TPG was unfair.

“The ACCC agrees that it would have no issue with TPG if it used, instead of the word ‘prepayment’, the words ‘access fee’,” O’Callaghan wrote.

“In my view, it is artificial to give the single word ‘prepayment’ as much work to do as the ACCC case requires.”

The ACCC said on Friday it believes the Court made an error, and was hence appealing.

“Consumer awareness of important terms should not be expected where they are contained in the fine print of a long and detailed contract or, in the case of online contracts, after multiple clicks,” ACCC chair Rod Sims said.

“We remain concerned that TPG misled its prepaid customers about their ability to use up their full prepayment and to obtain a refund of any unused funds when they ended their contract.”

The ACCC and TPG are currently awaiting judgment in a much bigger case, as Justice Middleton is deliberating on whether to approve the merger of Vodafone and TPG, which the ACCC blocked in May.

Central to that case is the ACCC’s contention that TPG will build a fourth mobile network if the telco is prevented from gaining control of the Vodafone network.

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