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ACCC Takes Big Stick To Foxtel Over Dodgy Subs Offer

By David Richards | Thursday | 16/05/2013

The Australian Competition and Consumer Commission has taken a big stick to Foxtel after investigating claims that they mislead consumers over a subscription offer where a TV was offered as an incentive to sign up for what has been labelled the 'most expensive' pay TV service in the world.

Management at Foxtel, which is 50% owned by Telstra, has been forced to provided the ACCC with a court enforceable undertaking following allegations that they breached Australian consumer law with their free television offer.

It was only yesterday that Foxtel was described by Fairfax Media as a 'Crappy, Repetitive, Overpriced Shake-down Racket'.

Desperate to increase subscribers Foxtel told customers who subscribed to a 12 month plan between 12 February 2012 and 5 April 2012 they would receive a free 22 inch neoniQ television within ten days of installation of their pay TV service. The offer was advertised in a nationwide campaign, which included television advertisements and direct marketing.

Shortly after the promotion period ended a significant number of customers who signed up to the offer claimed that they did not receive the televisions within ten days of installation. The ACCC claims that Foxtel did not take sufficient steps to ensure that it could deliver on their subscription inducement promise. 

It has also been revealed that Foxtel mislead several parties when they made claims that the offer was limited to 1,500 free televisions but signed up nearly 8,400 subscribers to the promotion.

"It is important for businesses to have a reasonable basis for any promises made to consumers otherwise they risk breaching the Australian Consumer Law," ACCC Chairman Rod Sims said.

"Businesses must review claims made in advertisements to ensure they remain accurate at all times."

The part News Ltd. owned business has undertaken to give a subscription credit, to current Foxtel customers who:

subscribed to the free television offer between 12 February 2012 and 5 April 2012;

were not sent a free television within ten business days after installation; and

still had a Foxtel subscription as at 1 May 2013.

The Pay TV Company has told the ACCC that they will use its best endeavours to ensure that by 15 July 2013 these customers will receive one month's subscription credit, based on their subscription fee on 15 May 2013.

Foxtel has also undertaken to refrain from engaging in similar conduct in the future and to appoint a qualified compliance professional to conduct a review of any areas of its business where there is a risk of breaching competition and consumer laws.

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