ACCC appeal about TPG prepayments dismissed at Federal Court

TPG ekes out another win against the Australian consumer watchdog.
Written by Campbell Kwan, Contributor

A Federal Court appeal made by the Australian Competition and Consumer Commission (ACCC) was dismissed on Thursday morning, finalising a judgment that found TPG did not make misleading representations about its prepayment protocols.

The case involved a AU$20 prepayment by customers to cover services not included in their plans, such as overseas phone calls.

When the balance fell below AU$10, TPG would automatically top up the balance from the customer bank account or credit card, or if the customer left TPG, the balance was forfeited. The ACCC had alleged that TPG made misleading representations about the payment since March 2013.

In the judgment, made in October last year, Justice O'Callaghan said the case hung on whether the use of the word "prepayment" was misleading or deceptive, and whether the forfeiting of the unused balance to TPG was unfair.

"The ACCC agrees that it would have no issue with TPG if it used, instead of the word 'prepayment', the words 'access fee'," O'Callaghan wrote.

"In my view, it is artificial to give the single word 'prepayment' as much work to do as the ACCC case requires."

The ACCC appealed the decision in November, saying at the time that it believed the court made an error.

"Consumer awareness of important terms should not be expected where they are contained in the fine print of a long and detailed contract or, in the case of online contracts, after multiple clicks," ACCC chair Rod Sims said at the time.

Justice Michael O'Bryan, who was responsible for assessing the ACCC's appeal, agreed with the original judgment's decision that use of the word "prepayment" was not dominant enough to convey a misleading representation. In coming to this conclusion, O'Bryan dismissed ACCC's appeal.

In light of the Federal Court dismissing the appeal, the ACCC said it would carefully consider the judgment.

"We took this case and appealed the previous decision because we considered that TPG was misleading consumers by not adequately disclosing the details about the mandatory prepayment," ACCC deputy chair Delia Rickard said in a statement on Thursday.

"We remain concerned that TPG's customers were not able to use up their full prepayment, or get a refund for any unused funds," Rickard said.

Elsewhere, the consumer watchdog's attempt at blocking TPG's merger with Vodafone was denied at Federal Court earlier this year. The court approved the merger as it believed there was no real chance that a fourth mobile network built by TPG would succeed commercially.

The ACCC has separately won two separate legal battles against Sony and Kogan in recent months over misleading representations made to consumers. Sony was ordered to pay AU$3.5 million in penalties while the amount Kogan will be fined is to be determined in the coming weeks.

The ACCC is also currently facing consumer lawsuits against Google and Samsung, with the consumer watchdog raising another legal action against Google earlier this week over allegations the company did not gain explicit consent from consumers when it expanded its use of personal data and privacy policy. 

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