Dodo has been ordered to refund customers after charging almost double fees for plans advertised as free.
The discount telco was slapped with the penalty following an investigation by the Australian Competition and Consumer Commission (ACCC) of its '”Free $29.90 Mobility Cap Plans” which promised customers a free Eee-PC, fuel or cash.
The regulator found the telco had deceived customers by advertising the gifts as free when comparable standard plans were up to $30 a month cheaper.
Dodo splashed TV advertisements for the 'free' plans between October and March this year and on its Web site.
ACCC chairman Graeme Samuel said the telco had been previously warned about misleading advertisements.
“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," Samuel 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."
Dodo has been blamed for a record spike in telecommunications complaints to the industry regulator, and was slapped with a $147,000 fine last last year for breaching the Do Not Call register.