Telstra – Unlock this.

Dear Mr Groom,

Thank you for your email dated 10 October 2008 to the Australian Competition and Consumer Commission (ACCC) regarding Telstra.

The role of the ACCC is to ensure compliance with the Trade Practices Act 1974 (TPA), which is designed to encourage fair trading and discourage anti-competitive conduct through a specific set of competition and consumer protection rules.

I note from your email that you purchased an iPhone from a Telstra store for $850 and you were informed that you needed to call Telstra to arrange for them to unlock the phone to enable you to use it on the Three Network. You indicated that you asked Telstra staff if there was any applicable fees for unlocking the phone and they advised you that there was no fee. You also stated that you perused Apple and Telstra’s websites and did not see any reference to a fee for unlocking the iPhone. However you subsequently found that there was in a fact a ‘hidden fee’ for unlocking your phone. The conduct you have described could potentially breach sections 52 and 53(e) of the TPA.

Section 52 of the TPA is a broad provision which prohibits a corporation, in trade or commerce, engaging in conduct which is misleading or deceptive, or which is likely to mislead or deceive. Whether particular conduct is misleading or deceptive is a question of fact to be determined in the context of the evidence as to the alleged conduct and to the relevant surrounding facts and circumstances. If you think you have entered the contract under misleading circumstances, you should first attempt to pursue a remedy with Telstra. Section 53(e) prohibits corporations from making misrepresentations about the price of goods and services. The conduct that you describe may be at risk of breaching these provisions of the TPA. For this reason I have lodged details of your complaint in our national database.

In assessing any complaint, staff of the ACCC would generally determine whether or not the matter falls within the jurisdiction of the TPA, whether or not there appears to have been a breach of the TPA, and if so, whether the impact of the conduct is so serious and widespread that it is appropriate that the ACCC should take some action. The ACCC generally takes enforcement action in circumstances where there are broad flow on benefits for industry and consumers alike. While there may be some instances were a breach of the TPA has occurred, it may be more appropriate for consumers to pursue these matters individually as a private matter and in many instances their local Office of Fair Trading will be able to assist with advice on how to proceed in such matters.

The conduct about which you complain may also contravene the Fair Trading Act in New South Wales. For conduct occurring within New South Wales, the ACCC would generally refer consumers to the New South Wales Office of Fair Trading (Tel: 13 32 20; website: www.fairtrading.nsw.gov.au). If you have suffered any loss as a result of relying on any misrepresentation, you may be able to recover that loss in a Small Claims Tribunal. The New South Wales Office of Fair Trading can also provide details about this procedure.

Your matter is important to the ACCC as it assists us in determining issues with national or wider public interest implications. We closely study the patterns of complaints that we receive to ensure that our enforcement and education actions are focused on the areas of greatest concern to Australian consumers. Consequently, the details of your matter have been recorded and will be used to determine whether there is a pattern of behaviour by a particular trader or in a particular industry that raise broader concerns.

Thank you for contacting the ACCC with your concerns. I trust this information is of assistance.

Yours sincerely

Monica

ACCC Infocentre

Ph: 1300 302 502

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