The court has spoken! Why Telstra may owe thousands of customers compensation
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Internet service providers play a crucial role in keeping Australians connected, making transparency and reliability essential.
However, recent developments have put one major provider under scrutiny for actions that have left thousands of customers questioning the service they received.
What unfolded next led to legal action and a significant ruling from the Federal Court.
Australia’s Federal Court found Telstra misled thousands of customers by secretly lowering upload speeds without informing them.
The ruling followed legal action by the Australian Competition and Consumer Commission (ACCC), which argued Telstra had made false or misleading claims about the upload speeds of its Belong NBN plans.
ACCC commissioner Liza Carver said the company’s failure to notify affected customers meant they were denied the opportunity to assess whether the service still suited their needs.
‘Telstra’s failure to inform customers that their broadband service had been altered denied them the opportunity to decide whether the changed service was suitable for their needs,’ she said.
In late 2020, Telstra reduced the maximum upload speed for 8,897 Belong customers, shifting them from a 100/40Mbps plan to a 100/20Mbps plan while continuing to charge the same price.
The company paid NBN Co $7 less per month for the downgraded service but did not pass on any savings to customers.
Telstra admitted in 2021 that it had not informed customers of the speed reduction and later issued a one-off $90 credit to those affected.
Carver criticised Telstra for misleading customers while continuing to charge them the same rate for a diminished service.
‘It is simply unacceptable for a supplier of essential services to mislead consumers when reducing the quality of the services it is providing to its customers,’ she said.
She added that as the country’s largest retail broadband provider, Telstra should be held to a higher standard and that affected customers deserved compensation.
‘We expect better from the country’s largest retail broadband internet service provider and believe these customers, who ultimately received a service they did not agree to, should be compensated,’ she said.
Telstra expressed disappointment with the court’s decision.
A Telstra spokesperson stated that the company aims to act in the best interests of its customers.
‘While we’re disappointed with this outcome, we respect the court’s findings and will review the decision thoroughly before determining our next steps,’ they said.
Meanwhile, the ACCC is still assessing potential penalties for Telstra.
The consumer watchdog confirmed it is ‘seeking declarations, penalties, consumer redress, costs, and other orders,’ with a decision on penalties to be made at a later date.
In a previous story, Telstra customers were already feeling the strain after unexpected price hikes left many paying more than they anticipated.
Now, with the latest court ruling, questions about the company’s transparency continue to grow.
Read more about how Telstra’s pricing decisions have impacted customers.
With trust in service providers more important than ever, do you think Telstra’s response is enough to make things right? Let us know your thoughts in the comments.
However, recent developments have put one major provider under scrutiny for actions that have left thousands of customers questioning the service they received.
What unfolded next led to legal action and a significant ruling from the Federal Court.
Australia’s Federal Court found Telstra misled thousands of customers by secretly lowering upload speeds without informing them.
The ruling followed legal action by the Australian Competition and Consumer Commission (ACCC), which argued Telstra had made false or misleading claims about the upload speeds of its Belong NBN plans.
ACCC commissioner Liza Carver said the company’s failure to notify affected customers meant they were denied the opportunity to assess whether the service still suited their needs.
‘Telstra’s failure to inform customers that their broadband service had been altered denied them the opportunity to decide whether the changed service was suitable for their needs,’ she said.
In late 2020, Telstra reduced the maximum upload speed for 8,897 Belong customers, shifting them from a 100/40Mbps plan to a 100/20Mbps plan while continuing to charge the same price.
The company paid NBN Co $7 less per month for the downgraded service but did not pass on any savings to customers.
Telstra admitted in 2021 that it had not informed customers of the speed reduction and later issued a one-off $90 credit to those affected.
Carver criticised Telstra for misleading customers while continuing to charge them the same rate for a diminished service.
‘It is simply unacceptable for a supplier of essential services to mislead consumers when reducing the quality of the services it is providing to its customers,’ she said.
She added that as the country’s largest retail broadband provider, Telstra should be held to a higher standard and that affected customers deserved compensation.
‘We expect better from the country’s largest retail broadband internet service provider and believe these customers, who ultimately received a service they did not agree to, should be compensated,’ she said.
Telstra expressed disappointment with the court’s decision.
A Telstra spokesperson stated that the company aims to act in the best interests of its customers.
‘While we’re disappointed with this outcome, we respect the court’s findings and will review the decision thoroughly before determining our next steps,’ they said.
Meanwhile, the ACCC is still assessing potential penalties for Telstra.
The consumer watchdog confirmed it is ‘seeking declarations, penalties, consumer redress, costs, and other orders,’ with a decision on penalties to be made at a later date.
In a previous story, Telstra customers were already feeling the strain after unexpected price hikes left many paying more than they anticipated.
Now, with the latest court ruling, questions about the company’s transparency continue to grow.
Read more about how Telstra’s pricing decisions have impacted customers.
With trust in service providers more important than ever, do you think Telstra’s response is enough to make things right? Let us know your thoughts in the comments.
