7 December, 2023

Telstra Fined $3m By ACMA After Wrongfully Charging Customers

Telstra has been fined $3.01 million by the Australian Communications and Media Authority (ACMA) after it charged small businesses and customers for “inactive” internet services during an 11-year period.

More than 6,500 customers were wrongly charged $2,600 each on average. Telstra discovered and self-reported the breach.

It has already refunded $17.7m, including interest, with the remaining $3.4m to be repaid to customers by the end of the year.

ACMA chair Nerida O’Loughlin said she had “lost patience” with the company after a “series of significant billing errors”.

“Telstra has a history of incorrectly billing customers and it’s just not good enough,” she said.

“At a time when many small businesses are facing economic pressures, unaccounted costs can create very real stress and financial hardship.

“All telcos must have robust billing systems in place to ensure that consumers, including small businesses, are only paying for agreed and active services”.

The fine followed the regulator directing Telstra in September 2020 to comply with billing accuracy rules after it overcharged more than 10,000 customers almost $2.5m over a 12-year period.

A separate investigation found Telstra overcharged more than 11,000 customers about $1.7 million.

Telstra told the regulator that the billing issues were caused by the company failing to follow a series of steps in its ADSL internet service deactivation process.

Telstra group executive for global business services, Dean Salter, apologised, saying the telco “let these customers down”.

“Getting something as important as billing wrong isn’t acceptable, and this is clearly not the experience we want to be providing our customers,” Mr Salter said.

“These ADSL billing errors occurred because we didn’t follow the proper deactivation process, including when some customers migrated to the NBN, which resulted in some customers being charged for inactive services. We’ve reached out to our customers to explain what went wrong and what we’re doing to fix it, including refunding them for the incorrect charges with interest.

“We know our customers deserve better, which is why we reported the issue to ACMA and conducted our own extensive investigation. We have put new controls in place to prevent this issue from happening again, including monthly checks if ADSL services are being used by customers before they’re billed.

It has been a bad month or so for Australia’s largest telcos. Last week, Telstra was hit with a separate $300,000 fine from ACMA for “failing to provide accurate details of thousands of customers” in a manner that could compromise their safety and privacy. And, of course, Optus was hit with a major service outage that led to the resignation of its CEO, Kelly Bayer Rosmarin.

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