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Telstra Refunds $9.3M Over Misleading Billing

Telstra has refunded a whopping $9.3 million to 72,000 customers, after the ACCC ruled its ‘Premium Direct Billing’ (PDB) third-party service was misleading.

Back in April, the Federal Court ruled Telstra to pay $10 million in penalties for “misleading representations” about charges for premium digital content (e.g. games and ringtones).

As at October 2017, Telstra had earned around $61.7 million in net revenue from commissions on premium billing services, charged to over 2.7 million mobile numbers.

Following the ruling, Telstra agreed to undertake a consumer remediation program, resulting in $9.3 million refunds.

The court claims Telstra did not sufficiently inform customers PDB was set as a default on customers’ mobile accounts.

The latest action totals nearly $20 million in penalties and refunds Telstra has paid.

ACCC Chair, Rod Sims, asserts it’s a warning to all telcos, that misleading and deceptive conduct will result in “serious consequences”.

“We are pleased to see so many customers refunded by Telstra. It’s clear a large number were charged for content like ringtones and wallpapers that they did not want, did not use, and had difficulty unsubscribing from,” Sims adds.

Telstra has reportedly refunded consumers who were identified in its complaints record, coupled with those who contacted the Telecommunications Industry Ombudsman directly.

Customers who believe they were affected by unauthorised PDB charges are invited to contact Telstra directly on 1800 007 763 (post-paid customers), 1800 007 413 (prepaid customers) or 1800 007 830 (business customers).

“We’d encourage current or former Telstra customers to contact Telstra for a refund if they believe there were unauthorised charges on their account because of the PDB service,” urges Mr Sims.

The ACCC is also conducting an investigation into third party billing services (of other carriers), with the potential of further enforcement action to come.

In April 2018, Telstra and the ACCC agreed the below facts would be presented to the Federal Court:

  • Telstra was aware from early 2015 to at least June 2016, not least because it received a large number of calls disputing such charges, that the operation of the PDB service had led to a significant number of its customers unintentionally purchasing and being billed for PDB content subscriptions without their knowledge or consent.
  • Telstra failed to implement the identity verification safeguards for the PDB service which it used for other third party subscription services to authorise the charges (such as the customer entering a PIN or signing into an account).
  • Telstra was aware that family members such as children were at risk of inadvertently subscribing on a family member’s phone.

Further information is available on the ACCC’s website here.

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