Yesterday, Telstra announced it will be compensating NBN customers who were sold internet speeds that could not be achieved in the real world. At least 42,000 customers will be eligible for refunds (and the figure could be much higher). If you think you might be entitled to compensation, here's what you need to know.
The inherent unreliability of the NBN has caused thousands of Telstra customers to pay for speeds that were technically impossible from their household. According to the ACCC's investigation, many of the affected customers could not even receive the maximum speed of a lower-speed plan, despite paying for premium services.
This is in contravention of Australian Consumer Law and may constitute engaging in misleading or deceptive conduct and making false or misleading representations. Needless to say, Telstra is keen to fix the error before going to court. (To its credit, the telco did self-report the problem to the ACCC and is coming up with a plan for compensation.)
So what should affected customers do now? Let's take a look at the details.
Which Telstra customers are affected?
According to the ACCC, between September 2015 and November 2017, Telstra offered internet services through both its Telstra and Belong brands, advertising a range of different speed plans.
"Limitations on the affected customers' NBN fibre to the node or fibre to the building internet connections, however, meant that many customers' internet services were not capable of receiving the maximum advertised speeds of the plans," the ACCC explained.
Here are some of the specific Telstra plans highlighted by the ACCC, along with how they were affected:
- 26,497 (56 per cent) of FTTN customers on the 100/40 Mbps plan could not receive 100/40 Mbps. Of those customers, 9,606 could not receive 50/20 Mbps, which was the next speed tier plan down.
- 6,352 (45 per cent) of FTTN customers on a 50/20 Mbps plan could not receive 50/20 Mbps.
- 9,342 (2 per cent) of FTTN customers on a 25/5 Mbps plan could not receive 25/5 Mbps.
In short, if you signed up for a Telstra/Belong NBN plan between September 2015 and November 2017 and never received the maximum speed you paid for, you should be entitled to a refund.
What kind of compensation is Telstra offering?
Unfortunately, affected customers will not be receiving full contract refunds - if you've been on a dodgy plan for years, don't expect to get all your money back. (The internet was still working after all.)
Instead, Telstra will be offering several compensation options, ranging from releasing customers from their contracts (big whoop) to moving them to a cheaper plan. In either case, Telstra will refund customers the monthly premium they spent for the higher-speed plan. Here are the available options, as outlined by Telstra:
- A costless exit from their contract (including any bundle) and a refund
- Moving to a different speed plan and receiving a refund
- Remaining on their current speed plan and not receiving a refund
(Note: Customers who Telstra has already remediated will be offered the option to move plans or exit their plan but will not be entitled to a refund.)
How do Telstra customers get their refund?
In its announcement, Telstra said it will be contacting current and former customers who did not receive the speeds they paid for to talk them through the options for compensation. In other words, expect a call or email from Telstra in the next few days.
If you think you're entitled to a refund and don't hear anything, it's definitely worth contacting the telco and stating your case. You can call Telstra's technical support line on 13 22 00 or reach out to them online here.
We recommend running multiple speed tests at different times of the day and presenting Telstra with your evidence. The telco has already committed to reimbursing customers so hopefully there won't be much pushback against your claim.
If they do attempt to give you static, explain that you're next step will be to contact the Telecommunications Industry Ombudsman (TIO). This should result in a more accommodating response. Good luck!
What about non-Telstra customers?
The ACCC is gunning for other NBN providers for failing to deliver advertised speeds.
"We are mindful this is not just a Telstra problem; it is an industry problem where consumers are often not getting the speeds they are paying for," the ACCC warned.
"We will continue to investigate other retail service providers selling broadband plans over the NBN and take enforcement action where appropriate."
Don't be surprised if Optus, TPG, iiNet and others come up with compensation plans of their own in the weeks ahead.
Update: Optus has also announced it will be compensating NBN customers who did not receive advertised speeds. Details here.
Telstra is offering compensation to 42,000 customers after the telco promoted and offered NBN speeds that couldn't actually be achieved in the real world.