Telecommunications

Telstra refunds $9.3 million to thousands of customers after charging them for ringtones they didn’t want

Dominic Powell /

Telco giant Telstra has paid back over $9 million to 72,000 customers in Australia after it was found the company’s third-party billing service was charging customers without their knowledge.

Action taken by the Australian Competition and Consumer Commission in the Federal Court earlier this year has led to nearly $20 million in penalties and refunds to be paid by the telecommunications company due to misleading and deceptive conduct over its Premium Direct Billing (PDB) service.

In April, the Court found Telstra misled over 100,000 customers when it unknowingly charged them for digital content, such as games and ringtones. The customers were affected between 2015 and 2016, during which time the Court found Telstra did not adequately inform them the PDB service was set on by default on their accounts.

This meant these customers were charged for the content, even if they unknowingly accessed the service.

At the time, Telstra was fined $10 million for the conduct, and committed to refunding affected customers, which it said it had already done to the value of $5 million. Yesterday, the company notified the ACCC it had completed a further $9.3 million in compensation.

“We have directly refunded approximately 71,500 customers who we have identified as impacted and contacted a further 272,000 potentially impacted customers asking them to contact us if they believe they were impacted and would like to accept our offer to refund,” a Telstra spokesperson tells SmartCompany.

The PDB service has since been discontinued, however, prior to its deprecation, the company had made $61.7m in net revenue from the service.

In a statement, ACCC chair Rod Sims said the regulator was pleased to see the telco take action on this issue, and urged any affected customers to get in touch with the ACCC or Telstra if they believe they were hit with the charges.

“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,” 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.”

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

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