Alliance WA Pty Ltd has given the Australian Competition and Consumer Commission court-enforceable undertakings over its mobile phone and call plan advertising, including an undertaking to provide misled consumers with refunds.
Alliance admits that its advertising may have misled consumers, in breach of the Trade Practices Act 1974, to believe that the advertised mobile phone(s) and call plan, including all calls, would cost no more than the amount shown in the advertisements as the "Total cost $Y. That’s it!". In fact, the amount shown in the advertisements as the "Total Cost" was the cost of the mobile phone only and any calls made by consumers are subject to an additional per second charge.
Alliance will cancel the contracts and refund any mobile phone instalment payments made by consumers who believe they were misled by the advertisements, upon return of their mobile phone to Alliance.
"Mobile phone and mobile phone plan retailing is a very competitive industry and advertising plays a key role in suppliers promoting and securing sales for their products and services", Acting ACCC Chairman, Mr Ross Jones, said today.
"In trying to differentiate, or attract consumers to, their products and/or services, advertisers must ensure that they do not make false claims or create a misleading overall impression in their advertising about the cost or benefits to consumers of purchasing a particular mobile phone and/or call plan".
In addition to admitting that its conduct may have contravened sections 52 and 53(e) of the Act and offering refunds to affected consumers, Alliance has also undertaken:
- not to engage in similar conduct in the future;
- to contact all customers who purchased the mobile phone and signed up to the call plan, explaining that they may have been misled by the advertisements, what the actual call charges are and that if they believe they have been misled, they can claim a refund; and
- to implement a trade practices compliance program.
The ACCC acknowledges that once this matter was drawn to Alliance's attention the company immediately ceased promoting the relevant advertisements and has cooperated fully with the ACCC in offering the above undertakings.
Consumers wanting more information about the ACCC and its role and responsibilities should visit the ACCC website, www.accc.gov.au.