Telstra, Australia’s largest mobile operator, said it will pay a fine relating to the management of its third-party premium direct billing (PDB) service after the Australian Competition & Consumer Commission (ACCC) filed a case against the operator alleging it made false or misleading claims to consumers.
The operator agreed to a Federal Court’s orders, including declaring it breached regulations and to make joint submissions in relation to penalties totaling AUD10 million ($7.7 million), ACCC said in a statement. Telstra also committed to offer refunds to affected customers. The Federal Court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate.
During 2015 and 2016, thousands of Telstra mobile customers unwittingly signed up to subscriptions or charges with third parties without being required to enter payment details or verify their identity, the statement said. Telstra said more than 100,000 customers may have been affected and charged.
ACCC chairman Rod Sims said: “Telstra admitted that it misled customers by charging them for digital content, such as games and ringtones, which they unknowingly purchased. Many Telstra customers paid for content they did not want, did not use, and had difficulty unsubscribing from.”
Vicki Brady, Telstra’s group executive of consumer and small business, said: “We apologise to our customers who have been charged for PDB subscription services they did not knowingly request or could not opt out of.”
Telstra said it will contact customers it identifies as being impacted by the issue over the coming months and requested those who believe they may have been impacted to contact the company.
The PDB service enabled mobile customers to purchase online content including games, apps and videos from third parties on a subscription or one-off basis and have it charged directly to their mobile bill. Telstra exited this service entirely on 3 March.