Dodo to refund 16,000 customers over NBN streaming claims

Retail services provider (RSP) Dodo has told the Australian Competition and Consumer Commission (ACCC) it will fork out around $360,000 to refund customers over claims the telco made relating to entry-level NBN services.

The court-enforceable undertaking made by Dodo related to the RSP’s claim that its entry-level NBN plans were “perfect for streaming”. The claim was made between November 2015 and Mach 2018. During that period Dodo advertised that its plans, including services on the NBN’s slowest 12/1Mbps speed tier and with a monthly data allowance of just 10GB, were perfect for streaming.

“The ACCC was concerned that the Perfect for Streaming Statement represented that all of Dodo’s retail broadband plans, including the 12/1 Plan and broadband plans with a monthly data allowance of 10GB... were perfect for streaming music and video, including streaming high definition (HD) and ultra HD video on large screen devices... when this was not the case,” states the undertaking.

The Vocus subsidiary has committed to refunding excess data charges incurred by current and former customers who signed up to a 10GB plan during that period that it made the “perfect for streaming” claim, as well as allow current customers on the plan to exit their contracts without penalty.

“We were concerned that Dodo customers on these plans could not reliably stream high quality video, particularly when others in the household were using the internet at the same time,” ACCC chair Rod Sims said. “At 12Mbps, Dodo’s customers could not stream ultra HD video at all.”

“According to Netflix, high definition streaming uses up to 3GB of data per hour,” Sims said. “With these plans a customer would have to pay extra if they streamed just two or three movies.”

“Over the period of approximately 2.5 years that the statement was in use in some Dodo advertisements, excess usage charges resulted in a small number (less than 3%) of customers from customers exceeding their plan, at an average of approximately $23 per customer,” a statement issued by Dodo said. “Dodo will offer credits and refunds of the excess usage charges, and where applicable, waive any exit fees to current customers.”

“Doing the right thing by our customers is our focus and we apologise for our error,” said Vocus’ chief executive – business and consumer, Antony de Jong, said.

“We want the dodo brand to stand for simplicity and fairness and endeavour to reflect these values in all customer interactions. Our team will contact impacted current and former customers as soon as possible. Further, we ceased new sales of that specific NBN plan and promotion some time ago, turning our focus to offers that deliver a better experience."

Vocus in February revealed it did not intend to try to grow its share of the NBN consumer market, blaming the complexity of NBN pricing, a lack of pricing stability and operational complexity. Revenue from Vocus’ consumer arm dropped by 12 per cent to $350.4 million in the six months ended 31 December, with underlying EBITDA down 5 per cent to $10.9 million.

Copyright © 2019 IDG Communications, Inc.

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