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Telstra's hefty fine,
Overcharging, not benign,
Refunds must align.
Telstra slapped with $3m penalty and $21m refund bill after charging for inactive services
Telstra has been hit with a hefty $3 million penalty and has refunded over $17.7 million to customers for charging them for inactive internet services over an 11-year period. An additional $3.4 million is expected to be refunded to customers by the end of the year.
The penalty and refunds follow an Australian Communications and Media Authority (ACMA) investigation which found 6,532 customers, predominantly small businesses, were erroneously billed by Telstra an average of around $2,600 between April 2012 and August 2023.
This breach of customer billing accuracy rules under the Telecommunications Consumer Protections (TCP) Code is not the first for Telstra. The company was formally directed by ACMA to comply with the Code in 2020.
In September 2020, ACMA directed Telstra to comply with billing accuracy rules after it overcharged more than 10,000 customers almost $2.5 million over a 12-year period. A subsequent investigation in 2022 found Telstra overcharged more than 11,000 customers around $1.7 million.
ACMA Chair Nerida O'Loughlin said the regulatory body had lost patience with the ASX-listed telco after a series of significant billing errors.
"Telstra has a history of incorrectly billing customers and it's just not good enough. At a time when many small businesses are facing economic pressures, unaccounted costs can create very real stress and financial hardship," she said. "All telcos must have robust billing systems in place to ensure that consumers, including small businesses, are only paying for agreed and active services."
Telstra attributed the billing issues to the company failing to follow a series of steps in its ADSL internet service deactivation process. In response to the ACMA's findings, Telstra has implemented controls within its systems to address the risk of this issue recurring. These include monthly monitoring and confirmation that an ADSL service is being actively used by customers before billing takes place. Telstra has also agreed to report to the ACMA in six months about the effectiveness of these controls.
