TPG ‘prepayments’ trigger court move for compo

TPG Telecom faces court proceedings for allegedly pocketing millions of dollars from non-refundable fees that it dubbed “prepayments”.

The competition watchdog says customers signing up to a TPG internet plan have had to pay $20 for what was described as a prepayment to cover potential costs, such as overseas phone calls, not included in the plan.

Since March 2013, TPG has said on its website that the prepayment could be used for excluded services before a plan was cancelled, the Australian Competition and Consumer Commission said yesterday.

But TPG actually kept at least half, and potentially all, of the prepayment when customers cancelled their plans, the ACCC said.

“It is unacceptable that TPG only disclose this forfeiture in fine print,” ACCC deputy chair Delia Rickard said.

Ms Rickard said the ACCC estimated that since March 2013, TPG was likely to have kept millions of dollars paid by consumers in prepayments that were forfeited.

The ACCC alleges that when a customer’s prepaid balance fell to $10 or less, TPG automatically topped up the prepayment by direct debit to return the balance to $20. That meant customers could not use at least $10 of the so-called prepayment, the ACCC said. It said TPG’s standard contract term requiring forfeiture of the prepayment was unfair under the Australian Consumer Law.

The ACCC is seeking penalties and compensation for consumers. SEPARATELY, analysts have said rival telco Vocus faces ongoing weakness in its consumer and small-to-medium-sized business divisions in a chal- lenge for chief executive Kevin Russell. Mr Russell, who joined Vocus in May, set out an ambitious road map to make better use of the telco’s fibre and network infrastructure.

Analysts at investment bank Macquarie say Mr Russell’s efforts are likely to lead to better earnings for the group’s enterprise and wholesale division in the medium term.