1. Telco steals $60m 2. Telco fined $10m 3. ????? 4. $50m Profit!

[Spotty]

Telstra, a major telecommunications provider in Australia has been fined by the courts for ripping off its mobile phone customers by signing them up for a premium billing service they did not want, without their permission, and charging them a monthly subscription fee for the service, often without customers even aware they were being billed. The premium billing service was a system where the telecommunications provider offered billing services to third party companies where the billing would be charged via the account holders monthly phone bill rather than traditional payment methods.

The service was activated as default for all of their customers and many customers weren't aware they were being billed for a service they didn't use. In some cases people were charged for the services when they were assigned a new phone number that had previously been associated with a different person who had signed up for the service (either intentionally or unintentionally).

It has been revealed that the company has made over AU$60million from unlawful charges related to its premium billing services. The telecommunications company was fined only a fraction of this sum, being ordered to pay only AU$10 million in fines. This means after fines and legal fees, the Telco could be up to $50 million in profit from their dubious business practice.

 

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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.

_{http://www.news.com.au/technology/gadgets/mobile-phones/telstra-contacting-customers-after-being-fined-10-million-for-misleading-consumers/news-story/e88d89d8f34c15d0c552b8d7a34fc6ae}

 

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Telstra has been fined $10 million in the Federal Court for signing its mobile customers up to be charged directly for third-party online content without their knowledge or agreement. Up to 100,000 Telstra customers were signed up to its Premium Direct Billing (PDB) service by default, and paid extra charges on their mobile bills.

The PDB service allowed Telstra customers to purchase digital content from third-party developers, such as games and ringtones, outside the usual app marketplaces such as Google Play.

But Telstra PDB subscribers were charged even if they did not know they had been signed up, or if they used the service unintentionally.

Some Telstra customers were even charged for online services associated with other people's mobile phone numbers.

For three years, between 2013 and 2016, some Telstra customers who were given new phone numbers were charged for the online PDB content bought by the previous owner of that phone number.

In March, the ACCC took Telstra to the Federal Court, where the company admitted it made misleading or deceptive representations to customers, because it never adequately informed them that PDB was a default setting on their accounts.

But Telstra's fine is just a fraction of the $61.7 million in net revenue Telstra made from the PDB service up till October last year.
_{http://www.abc.net.au/news/2018-04-26/telstra-fined-$10-million-after-customers-charged-for-ringtones/9699246}

It goes on to say that Telstra was aware that it was ripping off customers and that doing so was an intentional act by the company.
 

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Senior managers 'aware' of wrongful charging, justice finds
Justice Moshinsky found that Telstra was unable to identify what proportion of its charges to customers, which totalled about $200 million, had been affected by the company's false and misleading representations.

But he found, given that Telstra had provided the service to almost 3 million mobile numbers since 2013, "it is likely that the actual harm caused has been significant".

He also found that Telstra's conduct was deliberate.

    "It was aware from complaints and its own internal analysis that its customers might be billed for a subscription service they had not intended to or agreed to acquire."
_{http://www.abc.net.au/news/2018-04-26/telstra-fined-$10-million-after-customers-charged-for-ringtones/9699246}

 

 

The charges were added to customers phone bills rather than being separately billed to their credit card or other payment method. This meant that users who did not review their monthly phone bill may not have noticed they were being charged extra for these services. Those who did discover the charges had difficulty cancelling the charges or seeking a refund for the charges as Telstra claimed that the customer would have to seek a refund from a third party company that Telstra was providing the billing service on behalf of.

This is just one of the many reasons why Telstra is colloquially known as "Tel$tra" or "Hellstra". It's pretty sketchy in the way they billed customers without confirming with the customer before signing them up to expensive premium services. The fact that people were being billed for services that were tied with their phone number, even if it was previously another person who possessed the number that signed up for the service, just shows how little the company cares about its customers and that they don't give a damn that they're ripping them off. I'm sure their entire plan was to hope customers didn't realise they were being billed. Telstra is known to be absolutely horrendous when it comes to cancelling a service or trying to get a refund for incorrect charges, so I can't imagine the hoops that people had to jump through and number of phone calls to the service department that had to be made for someone to have the service cancelled after noticing it on their account.

There is some hope for people who may have been incorrectly charged for the premium service, as it may be possible to seek a refund from the telecommunications giant for the charges. Users who have already contacted the company or the Telecommunications Industry Ombusman who have yet to receive a refund, should receive some communication from Telstra regarding a refund shortly. For other people affected you will need to contact Telstra yourself and seek a refund.

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“Telstra customers are encouraged to check their Telstra mobile account and, if they believe unauthorised charges have been applied under the PDB service, they should contact Telstra on 13 22 00 or click here to seek a refund.”
“Telstra has also agreed to contact and offer refunds to affected customers it knows have already complained to the Telecommunications Industry Ombudsman (TIO) or to Telstra directly about subscription charges under the PDB service but who have not already received a refund.”
_{https://newmatilda.com/2018/04/27/crime-really-pay-telstras-10-million-fine-50-million-less-stole/}

Sources:
http://www.abc.net.au/news/2018-04-26/telstra-fined-$10-million-after-customers-charged-for-ringtones/9699246
https://newmatilda.com/2018/04/27/crime-really-pay-telstras-10-million-fine-50-million-less-stole/
http://www.news.com.au/technology/gadgets/mobile-phones/telstra-contacting-customers-after-being-fined-10-million-for-misleading-consumers/news-story/e88d89d8f34c15d0c552b8d7a34fc6ae

[ScratchCat]

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Telstra has also agreed to contact and offer refunds to affected customers it knows have already complained to the Telecommunications Industry Ombudsman (TIO) or to Telstra directly about subscription charges under the PDB service but who have not already received a refund.

They only need to pay back users who notice? Whoever came up with this plan certainly will be getting a bonus...

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where the company admitted it made misleading or deceptive representations to customers, because it never adequately informed them that PDB was a default setting on their accounts.

If it is a default option your average consumer will never notice, the majority of people will just click away a banner using the first big button they see even if the option to get around it is there (e.g. local vs Microsoft accounts). This is a horrendous practice for a charging service.

[dizmo]

Well, when you're in a country that's descended from criminals...what do you expect?

[dizmo]

2 minutes ago, huilun02 said:

At least it beats being in a country where corporate level crime is legal

According to this article that's also true?

Which corporate level crime are you referring to?

[Spotty]

15 minutes ago, ScratchCat said:

They only need to pay back users who notice? Whoever came up with this plan certainly will be getting a bonus...

Yep.
The sad thing is that the company claims to know which customers were incorrectly billed, as the total revenue from the service was $200m, but the company only claims $60m of that figure was from accounts incorrectly billed. This means they must have an idea of which accounts were billed incorrectly and which were billed legitimately after knowingly and intentionally signing up to the service (I can't imagine anyone signing up to the service, but I guess you gotta have that Britney Spears ringtone).
The company just doesn't care about its customers and hopes that most won't notice the news regarding this and/or won't bother seeking a refund.

 

7 minutes ago, dizmo said:

Well, when you're in a country that's descended from criminals...what do you expect?

OI! When an Aussie robs you they rob you to your face, they don't pull these shady tactics and try to do it all sneaky like.
... Now that I think about it, that may be why we all ended up here. All the shady criminals weren't caught and got to live out their days in sunny England.

[dizmo]

2 minutes ago, Spotty said:

OI! When an Aussie robs you they rob you to your face, they don't pull these shady tactics and try to do it all sneaky like.
... Now that I think about it, that may be why we all ended up here. All the shady criminals weren't caught and got to live out their days in sunny England.

Hahaha, or as I like to call it, the good criminals

 

This news does confuse me though. I always thought the punishment for corporations was "x" times the crime, that way it's an actual deterrent.

[Beskamir]

This is why these "punishments" don't deter companies from doing shady shit.

[DIV1D3]

I'd think the 10M fine would be an additional sum they'd need to pay out on top of the total amount that was incorrectly charged to users, but if Telstra is doing it on an inquiry-only basis than they won't have to pay nearly as much as what they reaped through this. 

[mr moose]

On 4/28/2018 at 2:47 AM, dizmo said:

Well, when you're in a country that's descended from criminals...what do you expect?

Australia is actually a conspiracy, it was setup for the aristocracy to escape to with their rabbits and foxes,  they secretly sent all the criminals to the US where they set up large corporations and formed the government.

 

Telstra are definitely playing the cunt in this.  I just discovered yesterday that a friend of mine (not tech savvy and suffers severe mental illness) has been rorted by this.  I am going there tomorrow to sort it our for them.

 

 

[Arika]

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Telstra

That makes sense

[Carclis]

This comes as no surprise honestly. The only surprise here is that their mobile plan pricing could get any shittier and that people actually sign up to them over ANY of the competition.

[Spotty]

9 minutes ago, Carclis said:

This comes as no surprise honestly. The only surprise here is that their mobile plan pricing could get any shittier and that people actually sign up to them over ANY of the competition.

I think there's 2 reasons why people still choose to go with Telstra
 

1. They're bundling accounts. Telstra provides multiple services such as phone, internet, mobile, foxtel (cable TV), and other services that can be delivered on the same bill. Even family plans for multiple phones can be delivered on the same bill. Often you can get bundle discounts for having the foxtel (cable TV) provided on the same account as your phone bill that's on the same account as your internet, as well as further discounts for family mobile plans and other such things.
2. They're old people. For those who aren't Australian, Telstra was for a long time a Government owned and managed asset. It was publicly owned telecommunications infrastructure. They were the only company with lines in the ground, and this meant that it was essentially the only option for telecommunications services for a long time. In the 1990s(?) it was privatised and split up in to a private wholesale and private retail business and sold off.
   There's a lot of people in the older community who spent the majority of their lives with Telstra being their sole telecommunications provider, and they simply have no interest in changing.

[Carclis]

1 hour ago, Spotty said:

They're bundling accounts. Telstra provides multiple services such as phone, internet, mobile, foxtel (cable TV), and other services that can be delivered on the same bill. Even family plans for multiple phones can be delivered on the same bill. Often you can get bundle discounts for having the foxtel (cable TV) provided on the same account as your phone bill that's on the same account as your internet, as well as further discounts for family mobile plans and other such things.

I'm pretty doubtful about this one. Other providers offer the ability to bill to one account and offer similar bundles with less unremarkable prices.

1 hour ago, Spotty said:

They're old people. There's a lot of people in the older community who spent the majority of their lives with Telstra being their sole telecommunications provider, and they simply have no interest in changing.

I fear that this is the big reason, which is extremely disappointing. For a company as terrible as Telstra to get to where they are simply based on consumer ignorance and loyalty would reflect very poorly on us.