Internet provider Dodo will refund money to about 16,000 customers after the ACCC found some on NBN broadband plans advertised as "perfect for streaming" were hit with excess data charges for modest streaming usage.

Key points: Dodo advertised entry-level plans with maximum speeds of 12 mbps and only 10 GB of included data as 'perfect for streaming'

Dodo advertised entry-level plans with maximum speeds of 12 mbps and only 10 GB of included data as 'perfect for streaming' "What's outrageous about that is you're getting charged extra for using the service as advertised," said ACCC chair Rod Sims

"What's outrageous about that is you're getting charged extra for using the service as advertised," said ACCC chair Rod Sims Dodo says excess data charges averaged $23 per customer and affected less than 3 per cent of customers

Dodo has made a court-enforceable undertaking to refund up to $360,000 after admitting the claims made between late 2015 and early 2018 were likely to be false or misleading, in breach of consumer law.

The "perfect for streaming" claims were made in advertisements for entry-level broadband plans, including those with maximum speeds of 12 megabits per second.

"We were concerned that Dodo customers on these plans could not reliably stream high quality video, particularly when others in the household were using the internet at the same time," ACCC chair Rod Sims said.

"At 12 mbps, Dodo's customers could not stream ultra HD video at all."

Streaming giant Netflix recommends 5 mbps to stream HD quality and 25 mbps for ultra HD, while rival service Stan recommends between 4.5 and 7.5 mbps for HD and 15 mbps for ultra HD.

'A couple of movies a month'

Some of the plans also had a monthly data allowance of 10 gigabytes, which the ACCC said could be used up with only a "modest" amount of streaming.

"[That] may get you a couple of movies a month, but after that you got charged excess charges," Mr Sims said.

"What's outrageous about that is you're getting charged extra for using the service as advertised. We think that's simply unacceptable.

"People who are buying this plan would clearly want to watch more than a couple of movies a month, particularly if they're signed up to Netflix and paying the fees that they have to pay."

In a statement, Dodo said less than 3 per cent of customers exceeded their plan, with excess data charges averaging $23 per customer.

"Dodo will offer credits and refunds of the excess usage charges, and where applicable waive any exit fees to current customers," it said.

Antony de Jong, an executive at Vocus, which owns the Dodo brand, apologised for the "error".

"Our team will contact impacted current and former customers as soon as possible," he said.

"We ceased new sales of that specific NBN plan and promotion some time ago."