Telstra has been fined $10 million in a major penalty by the Federal Court. Source: Supplied
Telstra has been fined $10 million in a major penalty by the Federal Court. Source: Supplied

What to do if you've been stung by Telstra

IF YOU'VE ever bought a novelty ringtone or mobile game, you could have been hit with charges every month since, without even realising.

The practice was exposed yesterday when Telstra was hit with a $10 million fine for misleading its customers.

The telco has copped for signing Aussies up to the third-party Premium Direct Billing service, which was set as default on Telstra accounts and automatically charged customers for ongoing monthly subscriptions without their knowledge. The extra charges were easily overlooked if customers were not keeping a close eye on their phone bills.

Telstra's collected $61.7 million in commissions from the controversial billing practice between 2013 and October 2017, with charges billed to more than 2.7 million customers.

Although the telco has since been fined a record amount for signing up as many as 100,000 Aussies for digital subscriptions without consent, all of these customers are now be eligible for refunds.


Even though the charges for the digital content appear on your Telstra mobile bill, the telco did not control the cost because they were from a third-party provider.

Premium Direct Billing services could have come from the following:

• Ringtones

• Games

• Music videos

• Casting a vote on TV shows

• Entering competitions

• Services such as the Google Play app store, where customers could choose to pay for the content with their Telstra bill

• Telstra customers who were given new phone numbers between 2013 and 2016 could have been charged for content bought by the previous owner of that phone number.


Premium Direct Billing charges incurred before March 3, 2018, would have appeared on your Telstra postpaid bill at the end of the month.

The additional charges are found under "Third Party Purchases" on your Telstra bill, meaning the telco had paid the content provider on your behalf then recovered the cost from you.

Where to find charges on your Telstra bill.
Where to find charges on your Telstra bill.

As of last year, Telstra mandated a double opt-in process for Premium Direct Billing services, which meant customers were sent a confirmation text once it was active.

Customers would have also been sent monthly reminders if it was an ongoing subscription.

Telstra explained that a typical text would say: "FreeMsg: You have subscribed to Fun Tones and will be charged $8.50/week on your mobile account. To opt-out send STOP to 1978905. HELP: 1-300-955-000."

To stop receiving a service, customers would have needed to "opt out" or "unsubscribe" from the service.


Telstra spokeswoman Vicki Brady told the telco had stopped providing new subscription-based services and had begun contacting affected customers via text, email, post and phone to organise refunds. About $5 million has already been refunded.

"Over the past month, our dedicated team has contacted many of the customers who have been impacted by this to apologise and to offer refunds. This will continue over the coming weeks," she said.

"Customer experience is the number one priority and we know we don't always get it right, so we will continue to take steps to rectify these PDB charges where they need to be addressed."

Ms Brady said customers could also contact Telstra directly if they believed they had been involved in the scandal.

"Customers can check their bills. If they are concerned about any charges they are not familiar with, they can call our team. We have a dedicated team there to help customers who think they may have been impacted," she said.

"It should also be remembered that in the vast majority of cases our customers have opted into these services."

According to an Australian Competition and Consumer Commission (ACCC) spokesman, the onus did not fall entirely on Telstra to reach out to customers.

"Some customers would have legitimately made purchases. Telstra has no way of knowing simply because a charge appears whether the customer meant to purchase the subscription or not," he told


On Thursday, the Federal Court handed down its judgment after both the ACCC and Telstra jointly submitted that the telco pay a penalty relating to the management of its PDB service.

The court found that in 2015 and 2016, Telstra did not adequately inform customers it had set PDB as a default on their mobile accounts, which meant if customers accessed content through this service, even unintentionally, they were billed directly by the telco.

"PDB services have been recognised as an issue for the broader telecommunications industry and while we took a number of steps to improve our processes we acknowledge we could have done more and done it faster," Ms Brady said.

ACCC chairman Rod Sims slammed Telstra for the unsavoury practice.

"Thousands of Telstra mobile phone customers unwittingly signed up to subscriptions without being required to enter payment details or verify their identity. By introducing and operating the Premium Direct Billing service, Telstra generated substantial profits by exposing customers to unauthorised charges," he said in a statement.

"Telstra was aware that children were at risk of inadvertently subscribing on a family member's phone. The $10 million penalty imposed by the court recognises the seriousness of Telstra's conduct. In the ACCC's view, such conduct falls below community expectations for appropriate corporate behaviour."

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