Telstra says it has handed back $9.3 million to mobile customers over third party billing.
Telstra says it has handed back $9.3 million to mobile customers over third party billing.

Telstra’s $9.3m refund to mobile customers

TELSTRA has handed back $9.3 million to 72,000 mobile customers who were charged via opaque third party billing systems.

According to a report the telco gave to consumer watchdog the ACCC, Telstra gave the money to customers who were misled and charged extra on their bill through its Premium Direct Billing (PDB) service.

The PDB service allowed customers to purchase digital content from third-party developers that sell their content outside usual app marketplaces like Apple's App Store or the Google Play store.

When buying things like ringtones, games or digital goods, for example, companies are able to tack on the cost to the buyer's phone bill. The arrangement meant many consumers were often unaware of the true cost of what they were buying.

In April 2018, the Federal Court ordered Telstra to pay penalties of $10 million for making false or misleading representations about charges for digital content, such as games and ringtones.

Telstra discontinued its PDB service the following month. The company also agreed to carry out a consumer remediation program, which has resulted in the $9.3 million of refunds to date.

"We are pleased to see so many customers refunded by Telstra. It's clear a large number were charged for content like ringtones and wallpapers that they did not want, did not use, and had difficulty unsubscribing from," ACCC Chair Rod Sims said.

"Following our action, Telstra has paid close to $20 million in penalties and refunds. This should serve as a warning to all telecommunication providers that misleading and deceiving customers will result in serious consequences."

According to the ACCC, up until October 2017 Telstra had earned about $61.7 million in net revenue from commissions on premium billing services charged to more than 2.7 million mobile numbers.

In early 2017, a survey commissioned by the Australian Communications Consumer Action Network (ACCAN), found 12 per cent of respondents had been hit with unexpected third party charges through direct billing.

"Applied to the mobile customer base of Telstra, Optus and Vodafone, this 12 per cent equates to almost 1.9 million people who could have received unexpected charges on their mobile bills," said ACCAN Director of Policy, Una Lawrence in July last year.

"We estimate that collectively, consumers may have been charged as much as $20 million unexpectedly in the last six months."

If you're a mobile customer of Telstra and believe you are entitled to be reimbursed due to misleading third party billing payments, you are encouraged to contact your provider.

"We'd encourage current or former Telstra customers to contact Telstra for a refund if they believe there were unauthorised charges on their account because of the PDB service," Mr Sims said.

He added that customers of other telco providers might expect a similar payout in the future.

"The ACCC is also conducting a detailed investigation into the third party billing services of other carriers and further enforcement action may well follow."