Foxtel will give over 3000 customers credit for subscriptions after botching a free television offer, according to an enforceable undertaking provided to the Australian Competition and Consumer Commission.
The ACCC said between February and April 2012, Foxtel offered a 12-month subscription plan in which subscribers could also receive a free television within 10 days of installation.
The ACCC became aware a significant number of customers who signed up to the deal did not receive their televisions within the specified 10-day delivery time.
The ACCC said in a statement it did not believe Foxtel had taken “sufficient steps to ensure that it could deliver on this promise”.
The enforceable undertaking provided to the ACCC by Foxtel states approximately 3264 customers did not receive their televisions within the set time.
Following the delayed response times, customers took to online forums to complain about the service, with many customers reporting wait times of up to six weeks.
Foxtel has informed the ACCC it will give a subscription credit to customers who subscribed to the free television offer within the specified time frame, and were not sent a television within 10 days of installation and who were still subscribers as of May 1, 2013.
The ACCC has accepted this undertaking and Foxtel is endeavouring to give all the eligible subscribers one month free credit by July 16, 2013, based upon their subscription fee at May 16, 2013.
ACCC chairman Rod Sims said in a statement that businesses must make sure they can deliver on any promises made in their advertisements.
“It is important for businesses to have a reasonable basis for any promises made to consumers otherwise they risk breaching the Australian Consumer Law,” he said.
“Businesses must review claims made in advertisements to ensure they remain accurate at all times,” Sims says.
Partner at Hall and Wilcox, Sally Scott, told SmartCompany businesses need to ensure they have reasonable grounds before making promises or predictions.
“The Australian Consumer Law says that if a business makes a representation as to a future matter (such as a promise or a prediction), the business must have reasonable grounds for the representation. It must have those reasonable grounds at the time of making the representation.”
Scott says the ACCC has not treated this as a serious breach of consumer law.
“The ACCC has the option of seeking a court imposed penalty of up to $1.1million per offence.”
“In this case, Foxtel was not fined. This suggests that the ACCC did not believe it was an intentional or serious breach,” she says.
Foxtel has come under scrutiny from the ACCC before.
In 2012, Foxtel paid seven infringement notices totalling $46,200 after the ACCC alleged its Christmas sale advertisements were misleading, although the payment of an infringement notice is not an admission of guilt.
“Despite this prior case, the ACCC chose not to issue court proceedings and not to impose a fine. This demonstrates that the ACCC views the breach as a relatively innocent and minor one,” says Scott.