Telstra pays $9m compensation for wrongful charges

Telstra has paid another $9m to 72,000 customers unfairly charged for digital content such as games and ringtones.

The latest refund takes Telstra’s total compensation relating to its “Premium Direct Billing” billing service to around $20m.

Telstra has paid another $9 million in compensation to 72,000 customers who were unfairly charged for digital content, such as games and ringtones, they unknowingly purchased.

The latest refund takes Telstra’s total compensation relating to its “Premium Direct Billing” (PDB) third-party billing service to around $20m, with the telco already copping a $10m fine from the Australian Competition and Consumer Commission in April.

According to the ACCC, during 2015 and 2016, up to 100,000 Telstra mobile customers unwittingly signed up to subscriptions or charges with third parties, without being required to enter payment details or verify their identity, using the PDB service.

The competition regulator said Telstra has now not only paid the $10m fine but also paid $9.3m in compensation to date under a consumer remediation program.

Telstra, which shut down the PDB service in March this year, had also paid at least $5m in refunds while the service was in operation.

The PDB service, launched in July 2013, netted Telstra about $61.7m in net revenue from commissions. It allowed customers to purchase online content and have it charged directly to their mobile bill.

“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 boss Rod Sims said.

“This should serve as a warning to all telecommunication providers that misleading and deceiving customers will result in serious consequences.”

Telstra committed to providing refunds to customers it could identify in its complaint records and those who contacted Telstra or the Telecommunications Industry Ombudsman directly.

Mr Sims said current and former Telstra customers who believe they were stung by PDB charges to get in touch with the telco.

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