ACCC takes TPG Telecom to court over "prepayment" charges

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ACCC takes TPG Telecom to court over "prepayment" charges

The Australian Competition and Consumer Commission has taken TPG to court over misleading conduct claims related to a “prepayment” charge it asked from customers.

The ACCC alleges that the telco charged customers a $20 fee when signing up to a TPG plan as a prepayment to cover costs that might be incurred but are not included in their plan, such as overseas phone calls.

It added that the company represented on its website that the $20 could be used for excluded telecommunications services before a consumer cancels a plan, but the commission said the amount operates as a non-refundable fee, with TPG keeping at least $10 once a customer cancels a plan.

“A reasonable consumer would expect that this $20 payment would be refunded if it was not used, but in fact it is non-refundable,” ACCC deputy chair Delia Rickard said. “It is unacceptable that TPG only disclose this forfeiture in fine print.”

The commission also cited an automatic top-up function when a customer’s prepaid balance falls to $10 or lower, with TPG making a direct debit to return the prepayment balance to $20

Rickard added that the ACCC estimates that TPG is likely to have retained millions of dollars paid by consumers in forfeited prepayments, and said the representations made about the forfeiture and the top-up function were misleading.

“We have and will continue to take action to hold telcos to account for failing to comply with the Australian Consumer Law,” Rickard said.

The ACCC is seeking penalties and compensation for affected customers.

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