Spurred on by an investigation by the Australian Competition and Consumer Commission, a national mobile phone service provider will have to offer refunds to all consumers, due to a misleading advertising campaign.

Between October 2008 and March 2009 Dodo Australia Pty Ltd advertised a ‘FREE $29.90 Mobility Cap Plan’, ‘FREE Fuel’ and ‘Cash Offer’ 24 month mobile cap plan which offered consumers a free Asus Eee PC, a fuel card or a cash payment for free when they signed up to any one of the Free Offer Plans.

The ACCC started to investigate Dodo when it was highlighted that consumers were likely to have been misled or deceived by the advertisements.

The investigation revealed that Dodo offered cheaper mobile cap plans (that did not include free goods or cash) that were comparable (in included value and services) with the Free Offer Plans. In some cases the monthly fee for those comparable mobile cap plans was up to $30 per month lower.

The ACCC highlighted that once this was brought to the attention of Dodo they acted immediately.

“After being fully informed of the ACCC’s concerns, Dodo promptly ceased to publish the advertisements of concern and undertook to take action to ensure its affected customers will receive the goods and cash for free, as advertised. This includes paying refunds and lowering the monthly fees for the Free Offer Plans,” the ACCC said in a statement.

Graeme Samuel, ACCC chairman, used this example as a warning to the telecommunications industry and commented that the ACCC will punish all companies who break the Trade Practices Act.

“The ACCC has previously warned the telecommunications industry that practices prohibited by the Trade Practices Act including misleading advertising are in the ACCC’s sights,” he said.

“The telecommunications industry has had sufficient time to implement the necessary changes to address those practices. Those elements of the telecommunications industry that wish to test the ACCC’s resolve to reform the industry’s errant practices are on notice.”