Telstra under fire from Australian watchdog for misleading customers

Telstra under fire from Australian watchdog for misleading customers

The consumer watchdog has started proceedings against Telstra, after the nation's largest telco both permitted and profited from a third party billing service that allegedly billed customers without their knowledge or consent.

The telco has been operating its PDB service since July 2013.

While the PDB program has already been discontinued for third-party companies, certain services that Telstra offers through its own partnerships will continue to be charged to mobile bills - which includes subscriptions from the likes of Netflix, Foxtel, Apple Music and more (for a full list, visit this Telstra page).

Australian Competition and Consumer Commission chairman Rod Sims said Telstra has so far reaped $62 million in revenue from 2.7 million mobiles, with many customers among them paying for content "they did not want, did not use, and had difficulty unsubscribing from".

The announcement follows direct carrier billing services provider Impelus last month saying it will seek injunctive relief from the Supreme Court of New South Wales to prevent Telstra from banning its services.

Telstra has also agreed to make joint submissions about the imposition of pecuniary penalisation totalling $10 million.

"The federal court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate", the ACCC said.

Telstra's group executive of consumer and small business, Vicki Brady, apologised to customers who were charged for services they either didn't request or couldn't opt out of.


"It is clear for this specific type of service, we did not get that right".

If you're a Telstra customer who's experienced issues with PDB purchases and think you're liable for reimbursement, you we'd advise getting in touch with the telco directly.

"Telstra has admitted that it misled customers by charging them for digital content, such as games and ringtones, which they unknowingly purchased".

Telstra's refunds to customers affected by premium direct billing charges could be in the order of several million dollars.

Telstra will no longer support direct billing for services provided by Buongiorno Australia, Netsize, Mobipay Pty Ltd, Ansible and Digital Turbine.

"PDB services have been recognised as an issue for the broader telecommunications industry - Telstra took a number of steps to improve our processes but acknowledge we could have done more and done it faster".

Third party billing generally involves automatic payments for subscription services such as content, games, mobile apps, and videos.

When they complained to Telstra, they were directed to the third party provider, which the ACCC alleged made it hard to claim a refund or cancel the subscription. This policy establishes guidelines to help ensure safe and productive mobility.

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