Telstra has been ordered by the Federal Court to pay a penalty of $18 million for breaching the Australian Consumer Law after it moved almost 9,000 Belong customers to a lower speed plan without telling them.

In October and November 2020, Telstra migrated 8,897 customers on its Belong brand NBN plans from their current plan which provided a maximum upload speed of 40 Mbps to a service that provided a maximum upload speed of only 20 Mbps. The download speed was unchanged at 100Mbps.

Telstra did not tell customers of the change in maximum upload speed in their service at the time of the change.

“The $18 million penalty sends a strong message to all businesses that they cannot mislead consumers by making changes to key aspects of a service without informing customers of those changes” ACCC Commissioner Anna Brakey said.

In addition to the penalty, all affected customers have, or will be, remediated by Telstra with a credit or payment of $15 for each month the customer had been on the lower upload speed plan.

The total remediation that Telstra will pay to affected customers exceeds $2.3 million.

“Telstra’s failure to inform customers that their broadband service had been changed denied them the opportunity to decide whether the changed service was suitable for their needs,” Ms Brakey said.

“Misleading pricing and claims in relation to essential services, with a particular focus on telecommunications, is one of ACCC’s current enforcement priorities.”

Telstra made payments to some affected customers prior to the ACCC commencing proceedings. The remaining payments to customers are being made in accordance with a court-enforceable undertaking Telstra has given to the ACCC. Those customers will be contacted by Belong via email.  

The Court also ordered Telstra to pay a contribution to the ACCC’s costs. The Court will publish its reasons for judgment at a later date.

Telstra co-operated with the ACCC by making joint submissions to the Court about orders, including in relation to penalties.