Dodo Australia Pty Ltd has paid four infringement notices totalling $26,400 issued by the Australian Competition and Consumer Commission.
On 21 December 2010 the ACCC issued the infringement notices because it had reasonable grounds to believe that Dodo made false or misleading representations about the price of its services in advertising its Unlimited ADSL2+ broadband plan.
Between August and early October 2010, Dodo conducted a promotional campaign which included advertising on television, radio, billboards and its website for its Unlimited ADSL2+ Broadband plan. In the ACCC’s view, the advertisements represented that customers could purchase the broadband service alone for $39.90 per month, when in fact consumers could only purchase that plan if they also purchased a home telephone plan, the minimum cost of which was an additional $29.90 per month. This meant that a customer signing up to the plan would have to pay a minimum monthly charge of $69.80, not $39.90.
The ACCC had reasonable grounds to believe that Dodo contravened section 53(e) of the Trade Practices Act 1974* which prohibits a corporation from making a false or misleading representation about the price of goods or services.
The ACCC decided it was appropriate to issue four infringement notices ($6,600 for each notice) to Dodo, one for each type of media on which the advertisements were published.
“Traders risk breaching the Act if they selectively quote monthly component prices as the headlines in advertising campaigns without appropriately disclosing the actual total monthly cost to a consumer,” acting ACCC chairman Michael Schaper said.
“Consumers often compare the monthly price of internet and telecommunication services when considering the best deal. To prominently advertise the price of only one component and bury the total bundled price in the fine print is misleading.
“In such circumstances consumers might be misled into thinking the cost of the services are cheaper than they actually are.
“When advertising services which are paid on a periodic basis, traders should appropriately disclose the total periodic cost so that consumers understand their payment obligations,” Dr Schaper said.
Information about the ACCC powers to issue infringement, substantiation and public warning notices is available on the ACCC website.
*On 1 January 2011 as part of Australian Consumer Law amendments the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010.