The Federal Court has ordered Telstra to pay a $10 million
penalty for making false or misleading statements relate to its third-party
The fine follows action by the Australian Competition and
Consumer Commission which found that the telco misled customers and breached
the ASIC Act when it charged them for digital content such as games and
ringtones which they unknowingly purchased.
The court found that in 2015 and 2016, Telstra did not
adequately inform customers it had set the service as a default on their mobile
accounts. If customers accessed content through this service, even
unintentionally, they were billed directly by Telstra.
Telstra admitted that more than 10,000 customers of its
third-party premium direct billing service may have been affected. The telco has
ceased operating this service and said it would refund customers.
“Thousands of Telstra mobile phone customers unwittingly
signed up to subscriptions without being required to enter payment details or
verify their identity. By introducing the 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 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,” Sims said.
Telstra estimated it had provided refunds of at least $5
million and it will review any future complaints in light of this action. The
ACCC estimated further refunds may be in the order of several million dollars.
“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,” Sims said.
The ACCC undertook proceedings against Telstra under a delegation
of power from ASIC.
Telstra customers are asked to check their accounts and if
they believe they believe unauthorised charges have been applied, they should
contact Telstra on 13 22 00 or go here.
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