100,000 Telstra Customers Hit With Unauthorised Premium Service Charges

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Telstra has admitted to misleading customers, charging up to 100,000 people for signing up to ringtone, gaming, or other digital content subscriptions without payment details or identity verification taking place.

There's gonna be a whole lot of refunds going out for this.

"Many Telstra customers paid for content they did not want, did not use, and had difficulty unsubscribing from," ACCC Chairman Rod Sims said.

"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. Despite this, Telstra continued to bill customers, making substantial revenue from the service at the expense of customers."

Sims says 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," Sims said.

Testra's Group Executive of Consumer and Small Business, Vicki Brady, said these "Premium Direct Billing" services had been introduced by a number of mobile providers "to give customers a convenient way of charging certain types of online services to their phone bill".

"In a digital world, increasingly our customers have the option of buying things online that can be charged to their Telstra bill, and for their convenience we aim to make it as simple as possible. It is clear for this specific type of service, we did not get that right," Brady said.

"A large proportion of customers who decided to subscribe to a service were happy with it, however the number of complaints received over time shows there were issues with the PDB service that needed to be addressed. We apologise to our customers who have been charged for PDB subscription services they did not knowingly request or could not opt out of."

Brady says services have been recognised as an issue for the broader telecommunications industry. Telstra has now ceased operating the PDB service entirely.

Telstra estimates it has provided refunds of at least $5 million, and it will review any future complaints in light of this action and deal with those customers in good faith. The ACCC estimates further refunds may be in the order of several million dollars.

If you believe unauthorised charges have been applied under the PDB service, contact Telstra to seek a refund.

Telstra has agreed to deal directly with complaints about the PDB service and provide refunds where it is apparent that the customer had signed up to PDB content without their knowledge or consent.

Telstra has also agreed to contact and offer refunds to affected customers (who have not already received a refund) it knows have already complained to the Telecommunications Industry Ombudsman or to Telstra directly about subscription charges under the PDB service.

Operating since July 2013, as of October 2017 Telstra earned about $61.7m in net revenue from commissions on premium billing services charged to more than 2.7 million mobile numbers.


Comments

    Had this happen with optus, they basically claim that the third party is charging them so they just pass on the fee, I called bs and didn't let that fly took a few argument and logic of explaining to them if fraud occurs on my credit card the bank doesn't ask me to call the fraudsters and give them more information about myself so they can issue a refund, and I had a contract agreement with optus not this third party so I wouldn't be paying, in the end they agreeded and credited the charges to my account

      Yep, it's all about who you have a contract with. If Optus or Telstra charge you then your contract is with them, not whoever they've passed the bill on from. The third party has no obligation at all to give you a refund.

    Here is one way they get you signed up easily. When you visit certain sites, the telco (many of them did this) will rewrite the URL to add your phone number.

    So you visit dodgysite.com and telstra rewrites the URL and the site receives dodgysite.com/phone=55501234 or whatever. That way they can charge you as soon as you click something, without you having to enter any details - they already have it.

    So you may accidentally click a pop up ad or some other crap, it pops up before you realise and you accidentally click something, no worries, just close it. Nope, you are being charged now.

      I don't think it really works this way anymore? 6 years ago before HTTPS was common companies like Telstra would inject a header into HTTP requests that contained your MSISDN (basically, phone number), though it might've only been for approved domains. I'm pretty sure its been phased out now that its not possible with HTTPS (url, header, or otherwise).

        Yeah, simplified explanation of how it worked awhile ago. Not sure if they are still doing that. I remember reading a Whirlpool thread where people were working out all this extra info being sent out.

        There are some great investigatory threads on there now and then.

      Thanks for the explanation I had this exact thing happen with an ad popup when my mother was playing a sudoku app >.>

      One accidental click and a $15/month sub was added to the account.

      Telstra immediately refunded it and I disabled premium direct billing for the account. Kinda annoying to find out later that Telstra was actively facilitating fraud. It was slightly forgivable when I thought scammers were just exploiting an old and broken system.

    Do they get a 12 month ban for this? Or that only when the media beats something up, like with the cricket.

    I wonder if they will refund only those who call and complain, probably going to be many customers who for whatever reason miss this, pocket money for telstra.

    Had the same problem with Optus. The charges started around the end of the year. After I jumped up and down they refunded me the charges and turned it off my service.

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