Telstra Compensates Customers for Unauthorised Billing Charges
Friday 5 October 2018 @ 10.26 a.m. | Legal Research | Trade & Commerce
A recent Australian Competition and Consumer Commission (“ACCC”) Media Release reports that Telstra Corporation Limited (“Telstra”) has so far refunded $9.3 million to 72,000 customers after it was found by the Federal Court of Australia (“the Court”) in April 2018 to have misled consumers in relation to its Premium Direct Billing (“PDB”) third-party billing service.
The refunds to affected consumers were as a result of court action being initiated by the ACCC – see ACCC v Telstra Corporation Limited [2018] FCA 571 (26 April 2018).
Background
In March 2018, the ACCC commenced proceedings against Telstra in the Federal Court alleging that Telstra had made false or misleading representations to consumers in relation to its third-party billing service.
The Court found that Telstra misled customers and breached the Australian Securities and Investments Commission Act 2001 (Cth) (“ASIC Act”) when it charged customers for digital content, such as games and ringtones, which they unknowingly purchased.
The Court also found that in 2015 and 2016, Telstra did not adequately inform customers it had set the PDB service as a default on their mobile accounts. If customers accessed content through this service (even unintentionally), they were billed directly by Telstra.
The Judgment
In his April 2018 judgment, Justice Moshinsky ordered Telstra to pay penalties of $10 million for making false or misleading representations about charges for digital content, such as games and ringtones - see [para 17]:
Telstra agreed to compensate consumers that had been affected by the billing issue. Customers who have since been refunded include those identified from internal complaint records and consumers who went to the industry ombudsman about the charges.
The Sydney Morning Herald (“SMH”) reports that:
Comment from the ACCC
Commenting on the current action, ACCC Chair Rod Sims said:
Speaking to the SMH, Mr Sims was quoted as saying:
Comment from Telstra
The SMH also quotes a Telstra spokesperson as saying:
While at [para 84] of his judgment, Justice Moshinsky noted:
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Sources:
ACCC v Telstra Corporation Limited [2018] FCA 571 (26 April 2018)
Telstra refunds $9.3m to 72,000 customers – ACCC Media Release 196/18 (28 September 2018)