Money

Dodgy Ad Techniques That Telcos Can’t Use Anymore

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12:54PM September 17, 2009 | Angus Kidman

AdNasties
Advertisements for phone services are often rife with fine-print details and sneaky conditions, but new regulations should curb the worst excesses.

The ACCC earlier this week announced that it had signed deals with the three national network providers — Telstra, Optus and Vodafone/3 — to stop the use of deceptive terminology in those advertisements. In simple terms, that means that dubious advertisements promising cheap rates but not, for instance, pointing out these only apply between midnight and 7am, or only doing so in tiny print, won’t be allowed:

If you’re in the market for a new phone or service, then it’s always sensible to look closely at the terms and conditions associated with any deal. However, there’s no doubt that the way in which deals are promoted doesn’t always make that an easy task.

According to the ACCC, there are 12 common types of misleading conduct in telephone service advertising:

  • Deceptive ‘headline prices’ which are so rife with associated terms and conditions that few consumers would be able to access them;
  • The use of the term ‘unlimited’ on offers which have restrictions;
  • The use of the term ‘no exceptions’ on offers which do have some restrictions;
  • The use of ‘free’ to describe the cost of a phone, when in fact the monthly contract charges are designed to recover that cost;
  • Advertising a price per minute that doesn’t take into account flag falls and other charges;
  • Advertising a price which is only available as part of an overall bundle;
  • Prices for phone plans which don’t apply to typical usage or call types;
  • Advertising data allowances which only run for a limited period;
  • Promoting phone card rates which would only be available if a single continuous call was made;
  • Promoting broadband speeds that are a maximum theoretical speed rather than a realistic assessment of what is available;
  • Inaccurate claims about network coverage;
  • Failure to include the total price of a particular deal.

In truth, that list collectively sounds like nearly every phone and broadband advertisement I’ve ever seen, but it will be great to see the back of them. The agreement is a legal undertaking, so if anyone runs an advertisement (or other promotional material) that ignores it, they face a potentially hefty fine. The three companies account for around 90% of the local market, so the ACCC is anticipating the impact will be significant. (The undertaking runs for two years.)

The regulator has been having a busy year cracking down on dodgy advertisers, having raised the issue of rubbish phone advertising back in February and commenced a crackdown on dodgy SMS providers.

Telecommunications market leaders agree to raise the bar on clarity in advertising

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Comments

  • Wobble

    September 17, 2009 at 1:46 PM

    Good news. I’d like to also see some rules on telemarketing companies which call from overseas and sell their phone plans. I wonder if these rules apply to them.

  • Grim

    September 17, 2009 at 4:01 PM

    “Failure to include the .”

    It’s now illegal for telephone adverts to not include a full-stop? Please elaborate!

    • Angus Kidman

      September 17, 2009 at 4:04 PM

      I wish that was the rule. Alas, ’twas an error. Fixed now.

  • Dean

    September 17, 2009 at 10:31 PM

    As a Telstra employee (although thankfully for only a few more days), I am ecstatic to see the word unlimited being banned – especially when it comes to Internet services. We are told to call the Liberty plans and “unlimited” option, which I refused as it never sat comfortably with me. But then again, being forced to sell products whilst being in the billing “enquiries” department never did either. I guess that’s why I am an almost former telstra employee

    • Jason Cornelius

      September 23, 2009 at 12:02 AM

      I’d love to know what area of telstra you work, because if we were EVER to use the word unlimited when selling our Liberty plans, then we would be walked out the door. I’ve been working in the winback and billing area for 2 years now, and from day one we’ve been instructed to never use the term unlimited, not even for the Phone plans that include all local and STD calls.
      This is standard Telstra policy, and has been for years. Our instruction is to report ANY consultant that customers have told us have used that terminology.

      Jason

  • Magani

    September 18, 2009 at 7:50 AM

    Ummm, why does the ACCC have to sign an agreement(for 2 years according to your piece) with these providers to stop them advertising in an unlawful manner?

    What part of ‘blatantly deceitful advertising’ does the ACCC not have the power to prosecute?

    Am I missing something here?

    Thanks,
    Confused of Springwood.

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