ACCC fines Amaysim and Lycamobile a combined $138,600 for misleading ads
Amaysim and Lycamobile have forked out $126,000 and $12,600, respectively, in fines after the Australian Competition and Consumer Commission (ACCC) pursued them for allegedly misleading advertising.
The ACCC claimed both telcos advertised that their mobile plans were ‘unlimited’, when there were, in fact, maximum data allowances in place.
The Amaysim social media ad referred to an “Unlimited Mobile Data offer” and used the hashtag ‘#UnlimitedMobileData’, but the plan only included unlimited data for the first three renewals, before reverting to a capped data allowance.
The Amaysim ad in question
Similarly, Lycamobile also posted a Facebook ad referring to unlimited plans, when those plans also capped data and charged customers if they exceeded the allowance.
Amaysim’s fine is ten times higher than Lycamobile’s because the former is listed on the ASX.
The ACCC alleged both ads breached Australian Consumer Law because they were likely to mislead consumers, but noted that the companies’ payment of a penalty is not an admission of a breach.
“Consumers who saw the word ‘unlimited’ in the advertisements without any explanation of the limits of the plans were likely to expect they would not be charged additional fees for mobile data, no matter how much data they used,” the ACCC’s chair, Rod Sims, said.
It’s not the first time Amaysim has been fined for misleading marketing messages. The sim-only phone plan provider also provides energy plans, and was fined $900,000 by the Federal Court last year for making false or misleading marketing claims about discounts and savings on its energy plans.
The Lycamobile social media ad
The ACCC has regularly scolded the telco industry for misleading and deceptive advertising.
In 2009, TPG conceded its advertising regarding unlimited phone plans may have broken the law, and gave a court-enforceable undertaking. A year later, the ACCC took Optus to court, and won, because the business said its broadband plans were ‘unlimited’, when they actually reduced a customer’s internet speed once they reached a cap.
In 2014, Medion also gave a court-enforceable undertaking to the ACCC for claiming its Aldi Mobile ‘Unlimited Pack’ had unlimited features when significant usage restrictions were in place.
And in 2018, the competition and consumer watchdog successfully took legal action against internet company Activ8me for its advertising around the speed, data limits, and costs of its service. The Federal Court forced the business to pay $250,000 in penalties and refund customers.
Sims
That same year, Sims put the entire industry on notice, especially around the use of the word ‘unlimited’.
“The telco industry has been previously put on notice that their advertisements must be clear and transparent, and must not contain claims like ‘unlimited’ without a clear and prominent disclosure of any qualification or exception which applies to the offer,” he explained.
“We will continue to monitor mobile plan advertisements and won’t hesitate to enforce the law.”
Got a tip?
Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
Linkedin
topics
ACCC
Amaysim
Australian Competition and Consumer Commission
court case
Lycamobile
misleading advertising
misleading and deceptive
Rod Sims
