Telstra drops $2.20 billing sting

James Riley
Wednesday, 04 November 2009 06:38

IT Industry - Strategy

Ahead of a busy annual general meeting in Sydney today, Telstra chief David Thodey said the company would drop its controversial $2.20 surcharge for customers paying bills over the counter.

The fee was announced mid-year and first introduced from mid-September, causing a backlash among customers.

Thodey promised to automatically refund the "bill payment administration fee" to all customers affected over the next several months, and said the company would look for new ways to encourage customers to pay bill electronically.

South Australian independent senator Nick Xenophon, who says he had personally raised the issue with the Telstra chief welcomed the change, and has now targeted Optus and other service providers who charged extra for handling cash.

Senator Xenophon will put forward an amendment to changes to a consumer law bill be that will be before the Senate later this month that would make it illegal for companies to charge extra for cash handling.

"If companies want people to use electronic banking to settle bills they should motivate them with some kind of incentive," Senator Xenophon said.  "They shouldn't penalise people for using Australian legal tender."   

Telstra's Thodey said the company had sought to design a fee structure that exempted the elderly, pensioners and disadvantaged people, but that "it is now clear to me that introducing this fee across our existing plans was the wrong way to encourage customers to move to electronic payments."

"While others in our industry still charge for cash payments over the counter, Telstra will now look for other ways to encourage customers to move to electronic payments, possibly including the introduction of optional electronic-only plans."