Disputed bills saddle Telstra with $90m debt

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Disputed bills saddle Telstra with $90m debt

Self-inflicted, Telstra says.

Telstra incurred as much as $90 million in "self-inflicted" bad debts in the past financial year, caused largely by customers that disputed and didn't pay expensive bills.

Chief financial officer John Stanhope told an analyst meeting in Sydney today that bad debts increased 44 percent in the year ended 30 June 2010 to some $364 million.

About "$70 million to $90 million" of that amount Stanhope described as "self-inflicted bad debt" - debts that Telstra believed it either could have prevented or could prevent in the future by simplifying internet and phone plans and making them more easily understood by customers.

"We're pretty hard on ourselves," Stanhope said.

"What happens is that a customer might be described a plan, but when they get their first bill it's hard to understand or doesn't match the plan they thought they were going to get as described by someone at the front of house. Then a dispute occurs with the bill.

"Part of our simplification strategy is to make sure that customers understand the plan they have and how it will look on their bill."

Apart from "confusion by customers with plans and charges on their bills", Telstra said that "difficult economic times" also contributed to the $364 million in bad debts.

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