Telecommunications company 2Degrees has been fined $325,000 after it made misleading claims its business roaming plans for Australia were “free” or “at no extra” when in fact customers were charged after 90 days.
2degrees pleaded guilty to five breaches of the Fair Trading Act in the Auckland District Court.
Claims made by 2degrees in a widespread advertising campaign created an impression that customers on mobile business plans would be able to roam year-round in Australia at no extra cost when this was not the case, the Commerce Commission said.
2degrees prominently used claims such as “Aussie business roaming at no extra cost” and “the other guys charge for Aussie business roaming, we don’t”.
In fact, the “free” roaming was capped at 90 days a year, the commission said.
Customers exceeding this would be charged $7 to $8 per day of additional roaming.
Commerce Commission deputy chairperson Anne Callinan said businesses need to consider the overall impression of headline claims.
“Key information about claims they’re making needs to be easy to find and not buried in the fine print.”
2degrees did not include the 90-day qualifier in many cases, and when it was included, it was not clear enough to correct the impression, the court found.
The company has taken steps to rectify the claims and compensate impacted customers.
“This includes removing the 90-day limit on free business roaming in Australia, refunding current and former customers who were charged for business roaming in Australia in excess of 90 days, and updating their promotional material.”
Callinan said the word “free” was a powerful tool in marketing.
“Consumers should be able to rely on the truth and accuracy of advertising claims like these.”
2degrees said it accepted the decision.
“It was certainly not our intention to mislead business customers.”
