Telstra hit with millions in fines over charging customers for no service

Telstra has been ordered to pay more than $24 million in penalties and refunds after an Australian Communication and Media Authority (ACMA) investigation found it had been overcharging customers for more than a decade.

ACMA found Telstra had charged a total of 6532 customers for inactive internet services between April 2012 and August 2023. Each customer was overcharged an average of $2600 during this period.

Telstra has already refunded $17.7 million to affected customers, the majority of whom are small businesses, with a further $3.4 million in refunds expected by the end of the year. On top of that, it has paid a $3,010,320 fine.

What has Telstra done?

ACMA says Telstra breached billing accuracy rules laid out under the Telecommunications Consumer Protection (TCP) Code and that the penalties are harsh because Telstra failed to comply with previous ACMA rulings in 2020 and 2022 that it comply with the code.

Back in 2020, Telstra was found to have overcharged around 10,000 customers almost $2.5 million over a 12-year period. In 2022, approximately 11,000 customers were found to have been overcharged about $1.2 million by Telstra.

ACMA chair Nerida O’Laughlin says the regulator has lost patience with Telstra after these repeated billing errors.

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

“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 is a major player in the Australian telco sector and it needs to continue to prioritise its billing compliance and get its systems in order.”

Telstra has been warned that any further breaches of the TCP Code may result in ACMA taking the company to the Federal Court.

What steps are Telstra taking to ensure it doesn’t happen again?

The breaches are believed to have occurred due to Telstra not fully following ADSL internet disconnection procedures, resulting in customers being charged for internet services they believed they had cancelled.

Telstra has told ACMA it has now implemented stricter controls over its billing systems to ensure this doesn’t happen again and has agreed to report back to ACMA in six months on the effectiveness of these extra controls.

ACMA says customers concerned that they are being wrongly billed should first discuss the matter with their provider.

If you continue to have an issue with your provider that can’t be resolved, you can escalate the complaint to the Telecommunications Industry Ombudsman (TIO).

Are you a Telstra internet customer? Do you believe your bills are accurate? Let us know in the comments section below.

Also read: CEO resigns in the ‘best interests of Optus’ following nationwide outage