Phone Company Caught In Misleading Advertising
Posted on 9 August 2010 by LynThomas in Promotion, Society, Technology
In a clever, but misleading advertising gimmick, a phone card company, owned by Optus, led its customers to believe they were getting a specified rate per minute, for all calls, to a wide variety of countries.
The specified call rate of 1896 minutes of talk time, at half a cent per minute, could only be achieved through one uninterrupted, continuous call in excess of 30 hours. Or through a series of calls of exactly one, or five minutes duration.
The Federal Court ruled that phone card sellers Prepaid Services (PPS) and Boost had engaged in misleading conduct and made false claims in regard to the value, price and benefits of their phone cards.
The Australian Competition and Consumer Commission (ACCC) alleged PPS and Boost stipulated no fees, other than timed call charges would apply, when in fact other fees were charged.
The court declared that Boost’s conduct was false and misleading and ordered injunctions to prevent similar conduct in the future. It also ordered Boost to publish corrective notices and to pay the ACCC’s costs.
ACCC chairman Graeme Samuel said the telecommunications industry had been under scrutiny by the ACCC for some time and the court’s decision was a further wake-up call.
“The ACCC has been active in promoting truth in advertising in the telecommunications industry,” Mr Samuel said in a statement. “This action against Boost and PPS in the phone card sector of the market highlights that the ACCC will take court action where companies make misleading representations.”
In 2008 the ACC issued the following statement: “Advertisements are a crucial aspect of any type of business because they promote products or let the public know about them. Consequently, when this route is exploited by unscrupulous businesses persons to mislead the public, then it may destroy the very image of advertising. When that occurs, the public may lose faith in advertising in general and this may hinder sales for vast numbers of companies.”
The ACC believes that misleading advertising is so serious it may affect the overall marketing climate, if allowed to continue unchecked.
Trackbacks/Pingbacks
[...] A phone card company, owned by Optus, led its customers to believe they were getting a specified rate per minute, for all calls, to a wide variety of countries, in misleading advertising. Read how the Federal Court ruled against them… [...]