Singtel Optus will offer compensation to more than 8700 customers after offering maximum speeds on national broadband network plans that could not be delivered.
By promoting and offering these speeds that were unable to be provided, the company admitted it had likely contravened Australian Consumer Law.
The Optus NBN plans, offered from 1 September 2015 to 30 June 2017 marketed a range of speed plans, including a Boost Max with maximum download speeds of up to 100 megabits per second, and maximum upload speeds of up to 40 megabits per second, or 100/40 plans.
Due to technical limitations on fibre to the node and fibre to the building NBN connections, customers were unable to get the advertised speeds.
In November, Telstra was required to provide compensation to 42,000 NBN customers after its promised maximum speeds were also found to not be possible.
This was the second time a major internet provider has faced action for selling broadband speeds they could not deliver to customers, Australian Competition and Consumer Commission chairman Rod Sims said.
“Worryingly, many affected Optus FTTN customers could not even receive the maximum speed of a lower-tier plan.
“This is a concerning trend we have seen throughout the industry and we are working to fix this.”
Affected Optus customers included 5430 on FTTN 100/40 plans, of which 2337 could not achieve 50/20 and the others could not achieve the full 100/40.
A further 1519 consumers on 50/20 plans could not achieve this maximum and 1381 on 25/5 plans could not achieve this 25/5.
Optus provided a court-enforceable undertaking to the ACCC. This included information about the remedies that will be provided to affected customers, including refunds, moving speed plans, discounted speed plans and fee-free exit from contracts.
Affected consumers will be sent an email or letter by 2 March 2018.
The ACCC is still engaging with other retailers marketing speeds they are unable to deliver, and said there may be court action against this “bad behaviour”.
Optus and Telstra are the only two retailers to have updated their advertising in line with the ACCC’s recommendations issued earlier this year.
Mr Sims said it was “disappointing” other retailers hadn’t followed suit.
Optus will be required under the court-enforceable undertaking to check within four weeks of connecting a customer to a new NBN plan that they are getting the speed they paid for.
Remedies will be offered if they are achieving below the marketed speed.
“We are continuing to investigate other retail service providers selling NBN broadband plans, and will take enforcement action if we consider that they are not delivering on their promises to customers.”
An Optus spokeswoman said it supported greater transparency on broadband speeds and was taking measures to improve the quality of experiences for customers.
“Optus acknowledges that it did not have the appropriate procedures in place to confirm the speed of the NBN service at the time of purchase by affected customers,” she said.
“We apologise to customers who have been affected by this error and are putting a process in place to rectify this issue.
“We have been working cooperatively with the ACCC to remediate affected customers for differences between their chosen speed plan and the speed obtained.”
The Telecommunications Industry Ombudsman said residential consumers or small businesses with speed issues relating to services delivered over the NBN should contact their service provider first, before contacting the TIO if the complaint remained unsolved.