iiNet and Internode to compensate 11,000 NBN customers for slow speeds
iiNet and Internode are the latest internet providers to confess that they misled customers about their National Broadband Network (NBN) speeds, following an investigation by the consumer regulator.
More than 8,000 iiNet customers will be compensated for signing up to NBN contracts that promised fast NBN speeds which could not be delivered.
Internode will compensate more than 3,000 of its customers.
How slow did it get?
On its advertising between 2015 and mid-2017, iiNet promised its fastest speed was: “Up to 100Mbps. This is our fastest option and is sure to impress.”
As for Internode, it advertised: “NBN Platinum: up to 100/40 Mbps.”
Both internet providers admitted they likely engaged in misleading or deceptive conduct, or made false or misleading representations.
Sixty-four per cent of iiNet customers (7,621 people) on a 100/40 Mbps fibre to the node (FTTN) plan were unable to reach the speeds they purchased, the Australian Competition and Consumer Commission (ACCC) found.
The ACCC also found that 1,925 of those customers could not even reach half that speed — the next lower plan of 50/20 Mbps.
In relation to Internode’s FTTN customers, the figures were even worse. Thirty-four per cent of those customers (1,720 people) could not reach the highest speed of 100/40 Mbps — 479 of those customers could not even reach 50/20 Mbps.
“Internet service providers must provide accurate information to customers about the speeds they can access on the NBN,” ACCC commissioner Sarah Court said.
“Many customers could not reach the maximum speeds advertised by iiNet and Internode because their NBN connection was not capable of delivering it.
“Some customers couldn’t even receive the maximum limit of lower-speed plan.”
What next for customers?
Affected customers have the options of moving to a lower-tier speed plan with a refund, exiting their plan without cost, or requesting a refund.
iiNet and Internode will contact them via email or letter by April 27.
The letter or email will inform customers of those compensation options, and the maximum speed their connections can attain — which is only known once a customer is connected to the network.
Both companies are wholly owned subsidiaries of TPG, which reported an 11 per cent drop in first-half profit on Tuesday.
TPG’s share price has fallen even further since Tuesday morning.
It dropped 5 per cent to $5.74 at 1:30pm (AEDT), making it one of the worst performing Australian stocks on Tuesday.