Telstra has been found to have misled thousands of customers over the broadband speed it provided to them through its budget telecommunications arm, Belong.

The Federal Court this morning found that Australia’s biggest telco made false or misleading claims to 8897 Belong customers regarding their NBN plan after it was taken to court in 2022 by the Australian Competition and Consumer Commission (ACCC).

The customers affected were switched from an NBN plan with a maximum download speed of 100 megabits per second (Mbps) and a maximum upload speed of 40Mbps, to one with a maximum upload speed of 20Mbps without telling them or dropping their prices.

“Telstra’s failure to inform customers that their broadband service had been altered denied them the opportunity to decide whether the changed service was suitable for their needs,” ACCC Commissioner Liza Carver said.

“There was no reduction to the price Telstra charged its customers even though the cost charged by NBN Co to Telstra was $7 a month less for the new, lower speed service.”

The telco admitted it told some of the affected customers between 1 May 2017 and 19 September 2018 they had a maximum upload speed of 40Mbps when they were not.

Telstra “acknowledged its failure in 2021”, the ACCC said, and provided a one-off $90 credit to those 2785 consumers.

However, it continued to mislead customers after this period, the court found. 

The telco failed to inform a further 6,112 Belong customers who joined its 40mbps NBN plan between 20 September 2018 and October 2020 that their upload speed was slower than what they thought they’d signed up for.

“It is simply unacceptable for a supplier of essential services to mislead consumers when reducing the quality of the services it is providing to its customers,” Carver said.

“We expect better from the country’s largest retail broadband internet service provider and believe these customers, who ultimately received a service they did not agree to, should be compensated.”

Telstra’s penalty, as well as any compensation for customers, will be handed down by the court at a later date.