Telstra, Optus, Vodafone facing ACA Lawyers class action over ‘unlawful’ late payment fees

FIRST they came for the banks — now they’re coming for the telcos. Customers who have paid late fees could soon be in for a big payday.

CEO David Thodey speaking about Telstra's profit result last week.

FIRST they came for the banks — now they’re coming for the telcos.

Telstra customers who have paid late fees could be in for a big payday if a new multi-million dollar class action is successful.

Specialist law firm ACA Lawyers has announced a class action — backed by UK litigation funder Harbour Litigation Funding — against Telstra’s late payments fees.

The legal firm also intends to lodge class actions against Optus and Vodafone. Telstra, Optus and Vodafone customers who have paid a late fee within the past six years will be entitled to join the actions.

RELATED: BANK FEE CLASS ACTION TO SET AUSTRALIAN RECORD

ACA Lawyers will argue the fees represent an unlawful penalty because they do not reflect the actual loss to the company caused by the late payment.

The move comes after legal firm Maurice Blackburn initiated Australia’s biggest ever class action, which seeks compensation for customers of Westpac, St. George, Citibank, BankSA and ANZ over late payment fees.

ACA Lawyers principal Steven Lewis told news.com.au it was too early to say how many customers might take part in the action. “Keep in mind Telstra has 16 million mobile services and 7.5 million fixed voice — not everyone pays their bill late, but I can guarantee you most people have paid their bill late at least once,” Mr Lewis said.

Should the action be successful, customers could potentially be eligible for any late fees paid plus interest, minus the actual cost to Telstra as assessed by the court. “The thing to note is the people who are slugged with these fees are generally the ones who can least afford it,” he added.

CEO David Thodey speaking about Telstra's profit result last week.

In a statement, Mr Lewis said the action was about justice for the clients of Australia’s major telcos. He said if the actual cost of collecting the late fees is anything like the real cost of a bank collecting a late fee then Telstra’s clients are being “ripped off” on a massive scale.

“Last week Telstra announced a massive profit which is built in part on revenue from late payment fees often collected from families who can least afford it,” Mr Lewis said.

Telstra’s financial statement indicated it collected $272 million for “late fees and other miscellaneous fees” in the 2014 financial year, according to ACA.

The law firm estimates the telco may have collected a further $500 million in late and other miscellaneous fees since July 2009.

“Since 2000 hundreds of thousands of Telstra customers have paid late fees in the mistaken belief Telstra was entitled to charge the fee,” Mr Lewis added.

“But a recent court decision in relation to credit card fees found that late payment fees charged by banks are unlawful and that clients are entitled to get most of their money back.

“We will argue this is the same for the late payment fees charged by Telstra, Optus and Vodafone.”

Telstra currently charges a $15 late fee if the amount outstanding on the bill is $70 or more. Optus charges late fees of $15 if the outstanding amount is between $50 and $100, and $15 plus interest if the amount is over $100. Vodafone charges a flat late fee of $10.

A Telstra spokeswoman said: “We will review the claim when we receive it. We believe our late payment fees are reasonable in light of the costs we incur and we will strongly defend any claim we receive.”

An Optus spokeswoman said: “Optus has not received any legal claims from ACA Lawyers on late payment fees, but will assess any claims if and when they are made.

“Optus believes that its late payment arrangements for customers are fair and well-based.”

A Vodafone spokeswoman said: “We regularly review all of our plans, including fees, to ensure they are appropriate.”

Originally published as Telstra, Optus, Vodafone facing ACA Lawyers class action over ‘unlawful’ late payment fees