Home Business Telecommunications Telstra cops $10 millon fine over misleading billing charges
Telstra cops $10 millon fine over misleading billing charges Featured

Telstra has been hit with a $10 million fine for signing up as many as 100,000 customers for ringtones, gaming and digital content without their knowledge.

The fine has been imposed by the Federal Court after the regulator, the Australian Competition and Consumer Commission, took Telstra to court for misleading customers and breaching the ASIC Act.

The Court on Thursday ordered Telstra to pay the penalties for making false or misleading representations to customers in relation to its third-party billing service known as Premium Direct Billing.

Telstra, Australia’s largest telco, admitted in Court that more than 100,000 customers may have been affected and committed to offer refunds to those customers.

The Court found that in 2015 and 2016, Telstra did not adequately inform customers it had set the Premium Direct Billing service as a default on their mobile accounts and, if customers accessed content through this service, even unintentionally, they were billed directly by Telstra.

“Thousands of Telstra mobile phone customers unwittingly signed up to subscriptions without being required to enter payment details or verify their identity. By introducing and operating the Premium Direct Billing service, Telstra generated substantial profits by exposing customers to unauthorised charges,” ACCC chairman Rod Sims said.

“Telstra was aware that children were at risk of inadvertently subscribing on a family member’s phone. The $10 million penalty imposed by the Court recognises the seriousness of Telstra’s conduct. In the ACCC's view, such conduct falls below community expectations for appropriate corporate behaviour."

With resolution of the issue, Telstra has ceased operating the PDB service entirely and will refund customers affected by its actions.

And the telco says it has already paid $5 million in refunds.

“Telstra estimates it has provided refunds of at least $5 million, and will review any future complaints in light of this action and deal with those customers in good faith. The ACCC estimates further refunds may be in the order of several million dollars,” Sims said.

“The ACCC is now examining the third party billing services offered by other carriers and will not hesitate to take enforcement action if we believe they are breaching the law.”

The ACCC took the action on Telstra under a delegation of power from ASIC.

Sims says Telstra will assess complaints about the PDB service and provide refunds where it is apparent that the customer had signed up to PDB content without their knowledge or consent.

Telstra has also agreed to contact and offer refunds to affected customers it knows have already complained to the Telecommunications Industry Ombudsman or to Telstra directly about subscription charges under the PDB service but who have not already received a refund.

FREE SEMINAR

Site24x7 Seminars

Deliver Better User Experience in Today's Era of Digital Transformation

Some IT problems are better solved from the cloud

Join us as we discuss how DevOps in combination with AIOps can assure a seamless user experience, and assist you in monitoring all your individual IT components—including your websites, services, network infrastructure, and private or public clouds—from a single, cloud-based dashboard.

Sydney 7th May 2019

Melbourne 09 May 2019

Don’t miss out! Register Today!

REGISTER HERE!

LEARN HOW TO REDUCE YOUR RISK OF A CYBER ATTACK

Australia is a cyber espionage hot spot.

As we automate, script and move to the cloud, more and more businesses are reliant on infrastructure that has the high potential to be exposed to risk.

It only takes one awry email to expose an accounts’ payable process, and for cyber attackers to cost a business thousands of dollars.

In the free white paper ‘6 Steps to Improve your Business Cyber Security’ you’ll learn some simple steps you should be taking to prevent devastating and malicious cyber attacks from destroying your business.

Cyber security can no longer be ignored, in this white paper you’ll learn:

· How does business security get breached?
· What can it cost to get it wrong?
· 6 actionable tips

DOWNLOAD NOW!

Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

Popular News

 

Telecommunications

 

Guest Opinion

 

Sponsored News

 

 

 

 

Connect