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Following an investigation by the Australian Competition and Consumer Commission (ACCC), customers of M2 communications Pty Ltd will be offered a replacement mobile phone or refund for phones purchased at its Simply Mobiles website.

The ACCC found that from June 2007 to February 2009, M2 Telecommunications said that it was not required to provide refunds and that mobile phone manufacturers were responsible for all warranty claims on mobile phones sold through the company’s Simply Mobiles website. 

“The ACCC was concerned consumers may have been misled or deceived about their statutory warranty rights or the performance of their mobile phones by M2 Telecommunications,” ACCC Chairman, Mr Graeme Samuel, said today, “Consumers may have been misled as express warranties offered by mobile phone manufacturers are in addition to, and not in the place of, the statutory rights available to consumers under the Trade Practices Act. Statutory rights entitle consumers to a refund from a retailer in particular situations and cannot be excluded.”

M2 Telecommunications also represented that the preconfigured software of a particular carrier on a mobile phone will not impact on a customer’s ability to use the phone on any other compatible Australian mobile network.  The ACCC was concerned that the existence of preconfigured software does, or could have such, an impact in certain circumstances, and  particular phones sold through the Simply Mobiles website were compatible with all Australian 3G networks, whereas those mobile phones were not compatible with Telstra’s NextG network. 

M2 Telecommunications has given the ACCC court enforceable undertakings that it will not make similar representations in the future publish a corrective notice on its website and an information notice in a telecommunications industry journal that will inform the industry of its conduct and the ACCC’s concerns offer a mobile phone or refund of the purchase price to consumers who are experiencing difficulties with preconfigured software or the performance or use of their mobile phone on Telstra’s NextG network (other than coverage issues caused by the network), where M2 Telecommunications is unable to satisfactorily resolve the consumer’s concerns, and maintain its existing trade practices law compliance program.

“The telecommunications industry is a major source of warranties and refunds complaints received by the ACCC each year. The ACCC has increasing concerns that many businesses are not aware of their obligations and are quick to equate a consumer’s rights with those provided in express or voluntary warranties offered by manufacturers rather than the statutory protections afforded by the Act,” Mr Samuel said.

“I have put the telecommunications industry on notice that it must improve its standards. Poor advertising practices and misrepresentations about warranties and refunds are priority concerns for the ACCC”, he added, “The ACCC was pleased with M2 Telecommunications’ offer to provide redress to those consumers who may have been misled by its conduct.”

M2 Telecommunications can be contacted by email at help@simplymobiles.com.au

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