Telstra hauled before court over "premium" mobile billing

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Telstra hauled before court over "premium" mobile billing

Faces fines, refunds for up to 100,000 customers.

Telstra is facing fines of $10 million and refunds to customers who lost money to third party content services that were charged to telephony bills.

The telco has also been forced to disable “premium direct billing” for content services.

The decision affects services provided by the likes of Mobipay, m.Net Mobile and Digital Turbine, according to a list published by Telstra.

The ACCC today said it had instituted federal court proceedings against Telstra over the billing arrangement.

The competition watchdog said Telstra had “agreed to consent” to court orders in relation to the fine amounts and refunds, and had admitted to a set of facts in the filing.

It will be up to the federal court to decide whether the penalties are sufficient.

“The federal court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate,” the ACCC said.

During 2015 and 2016, more than 100,000 Telstra customers “unwittingly signed up to subscriptions or charges with third parties, without being required to enter payment details or verify their identity,” the ACCC said.

Customers - particularly children - found themselves signed up to services "without their knowledge or consent”.

When they complained to Telstra, they were directed to the third party provider, which the ACCC alleged made it difficult to claim a refund or cancel the subscription.

The arrangement was lucrative for Telstra, which “earned about $61.7m in net revenue from commissions on premium billing services charged to more than 2.7 million mobile numbers” up until October 2017.

The ACCC alleges Telstra contravened the ASIC Act as a result.

Telstra's group executive of consumer and small business, Vicki Brady, apologised to customers who were charged for services they either didn't request or couldn't opt out of.

However, she claimed "a large proportion of customers who decided to subscribe to a service were happy with it".

Telstra said it would contact customers over the coming months.

"Customers who believe they may have been impacted should call Telstra to discuss their concerns," Telstra said.

Carriers have generally been aware of issues around third party billing services for some time.

Telstra pulled the plug on new subscriptions to third party billed services in December last year, though it had allowed existing arrangements to continue.

Some third party billers are unhappy with the end of the arrangements.

ASX-listed mobile marketing and carrier billing company Impelus last month promised to take Telstra to court over its decision to stop the billing arrangement.

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