Telstra fined $3 million, repaying $21 million after overcharging customers for third time since 2020

Telstra fined $3 million, repaying $21 million after overcharging customers for third time since 2020
  • PublishedDecember 6, 2023

The Australian Communications and Media Authority (ACMA) also stung Telstra with a $3,010,320 fine for breaching customer billing accuracy rules and breaking its direction to comply with its code after a similar issue in 2020.

The authority says most of the 6,532 customers overcharged between 2012 and 2023 were small businesses.

ACMA chair Nerida O’Loughlin was scathing in her assessment of Telstra’s conduct, saying her organisation had “lost patience” after the third recent breach.

In 2020, Telstra was caught overcharging more than 10,000 customers almost $2.5 million across 12 years, before a 2022 investigation found that more than 11,000 customers had been overcharged about $1.7 million.

“Telstra has a history of incorrectly billing customers, and it’s just not good enough,” Ms O’Loughlin said in a statement.

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

A woman in a suit with glasses frowns
Nerida O’Loughlin says Telstra’s history of incorrectly billing customers is not good enough. (AAP: Lukas Coch)

Failure to close services properly

Telstra said it had not followed a series of steps in its ADSL internet deactivation process.

It has since implemented controls to stop the issues from recurring and will report to ACMA in six months about their effectiveness.

The ACMA press release noted that further contraventions of billing accuracy rules could lead to further action, including proceedings in the Federal Court. 

Telstra executive Dean Salter acknowledged getting billing wrong “isn’t acceptable” and he apologised to the affected customers.

Telstra reported the issue to ACMA and has refunded all but $3 million of the $21 million needing to be repaid.

“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,” Mr Salter said in a statement.

“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’ve let these customers down, we apologise for this, and it’s clear we need to do better.”

ACMA advises customers to check their bills, discuss any concerns with their telco, or complain to the Telecommunications Industry Ombudsman if issues cannot be resolved.

Recent history of problems

The three overcharging breaches named by ACMA since 2020 are not the only billing and account controversies surrounding Telstra in recent years.

In 2021, the telco was prosecuted by the Australian Competition & Consumer Commission (ACCC) for breaking the law in its sales tactics and treatment of Indigenous customers.

Sales staff falsely claimed products were “free”, failed to explain potential costs, and manipulated credit assessments, which had devastating consequences for many people.

Telstra was fined $50 million and agreed to offer compensation, improve its treatment of First Nations customers and pay for financial counsellors to find other people who may have been mistreated.

This year, however, financial counsellors called for a fresh investigation after the ABC acquired new figures showing the scale of the problem was larger than first thought.

The telco has also apologised for causing unnecessary distress to the families of deceased account holders.

Victorian woman Jenny Moncur had to spend almost a decade telling Telstra representatives that her husband, Royce, had died in 2014, despite supplying a death certificate early in the process. 

She said a 2019 complaint to the ombudsman failed to help, so she complained directly to the office of Telstra CEO Vicki Brady.

More than 20 other grieving families contacted the ABC after reading Ms Moncur’s story, reporting multiple attempts to contact Telstra and get accounts deactivated or names removed from accounts. 

An Aboriginal widow in remote Western Australia was even threatened with legal action by Telstra over a debt owed by her dead husband.

A financial counsellor who intervened on the widow’s behalf said the woman had notified Telstra of her husband’s death in phone calls, but the telco said it could not find records of this. 

Telstra said it had committed to fixing what were “systemic issues”.

“We absolutely have identified that there’s been a breakdown in getting customers through to our compassionate care team,” executive for contact centres Claire Johnston said in August this year. 

ACMA confirmed it was probing Telstra about its systems and processes for updating records, in response to the ABC’s reports.

“These are shocking instances of poor performance by Telstra, causing extreme distress for affected families

SOURCE: ABCNEWS

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