How Telstra made $62 million by misleading 100,000 customers
Telstra has misled 100,000 customers by overcharging them $62 million in digital content without their consent and knowledge.
The Australian Competition and Consumer Commission (ACCC) will take Telstra to Federal Court over claims it made false representation with its "Premium Direct Billing" service.
Premium Direct Billing allowed customers to automatically add paid services such as apps, sports streams and games to their phone bill instead of paying instantly.
However, Telstra has admitted between 2015 and 2016 the third-party billing service signed up thousands of customers to ringtone subscriptions or games without their knowledge and which they were not aware they had signed up to pay for.
ACCC chairman Rod Sims said: "Telstra has 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."
Mr Sims said the service s saw Telstra gain a 'substantial revenue' of $62 million from 2.7 million customer mobile phones.
"Telstra knew that the Premium Direct Billing service it operated led to large numbers of its customers being billed for purchases made without their knowledge or consent," Mr Sims said.
"Despite this, Telstra continued to bill customers, making substantial revenue from the service at the expense of customers.
"When customers contacted Telstra to complain many were directed to third parties, even though Telstra knew that they had difficulty getting a refund from third party suppliers, or cancelling their subscription. Customers were often left frustrated and out of pocket as a result of Telstra’s conduct."
Telstra has refunded $5 million to affected customers and will contact other customers as they are identified.
They have stopped their premium direct billing service with Telstra admitting they “did not get that right”.
If you’re worried you have been overcharged, get in touch with Telstra.