Telstra is being taken to court by the consumer watchdog, is facing fines of up to $10 million and user refunds of five million dollars after the telco allegedly charged its own customers unawares through a third party billing service.
The Australian Competition and Consumer Commission said on Monday that it has started proceedings against the nation’s largest telco after Telstra both permitted and profited from a third party arrangement that allegedly misled and billed users without their knowledge or consent.
Third party billing generally involves automatic payments for subscription services such as content, games, mobile apps, and videos.
Telstra shut down its Premium Direct Billing service on March 3 after more and more of its customers complained, often unsuccessfully, about random charges appearing on their phone bills for services they did not intend to purchase.
Some of the now cancelled services from third party apps include Channel Seven and Channel Nine competitions from Cash Cow, Better Homes & Gardens, Block of Cash Giveaway, Dancing with The Stars and My Kitchen Rules Ringtones.
ACCC chairman Rod Sims said Telstra has so far reaped $62 million in revenue from 2.7 million mobiles, with many customers among them paying for content “they did not want, did not use, and had difficulty unsubscribing from.”
Both parties have agreed to jointly submitting to the federal court regarding the possible penalties relating to the recently defunct service that for over two years led to possibly 100,000 users being billed for unknown purchases.
The competition watchdog said Telstra has admitted to making false and misleading representations to its customers in the submission.
The ACCC alleges that between 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.”
Telstra has reportedly reimbursed customers up to five million dollars, so far.
The watchdog said the Federal Court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate.
Customers who believe they may have been impacted should call to discuss their concerns, Telstra said in a statement on Monday.