Vodafone must also refund users stung by third-party billing

Vodafone has agreed to refund or credit the accounts of users charged unwittingly for premium content services.

The carrier is the third of Australia’s three mobile operators to commit to refunds following an investigation by the Australian Competition and Consumer Commission (ACCC).

Vodafone initially enabled direct content billing “automatically” on accounts, and a subscription could be unknowingly added with as little as one or two clicks.

Direct content billing is a largely discontinued model where third-party providers of games, ringtones and other content could bill for subscriptions directly through a consumer’s phone account.

“The content was marketed and provided by third parties who paid Vodafone commissions for sales to its customers,” the ACCC said in a statement.

In an enforceable undertaking published today [pdf], Vodafone said it saw “a two-fold increase in revenue but a three-fold increase in complaints about the DCB service” in 2014-15 compared to 2012-13.

The complaints were that customers had inadvertently signed up and then couldn’t quit the subscriptions.

At the time, Vodafone directed complaints directly to the third-party content firms, and customers reported “difficulties obtaining refunds from those” providers.

Vodafone stopped offering content subscriptions in mid-2015, killed existing subscriptions “by mid-2016”.

It also moved to “a 'single aggregator model' to allow Vodafone to deal directly with complaints and manage services”, which saw complaint numbers to the telco and the Telecommunications Industry Ombudsman fall.

However, complaints were still inconsistently dealt with, according to the enforceable undertaking.

“Until December 2017, Vodafone had a general policy of referring complainants to [third-parties] to resolve their dispute in the first instance,” the undertaking states.

“After changing the policy in December 2017 to require customer complaints to be handled by Vodafone directly, Vodafone found that the new policy was not always being applied correctly, and it reiterated the policy to its customer care team in September 2018.”

Since March 2018, Vodafone has continued to offer a “limited number of DCB content offerings that require express customer agreement and which had not been the subject of complaints”, the undertaking states.

Vodafone has agreed to look back at customers that complained in the past - to Vodafone, the TIO or to third-parties - and to either issue them refunds or account credits.

So far, only a quarter of Telstra and Optus customers eligible for refunds have taken up those offers.