Telstra accused of third party billing ‘scam’ that charges customers hidden costs

By @chelean on
Telstra Australia
A man and power lines are reflected in a Telstra poster adorning a public telephone in Sydney, Australia, August 13, 2015. Reuters/David Gray

Telstra’s nightmare for 2016 isn’t over yet. Australia’s largest telco is accused of mobile billing “scam,” in which customers complained that they are charged thousands of dollars after clicking a third-party website.

A telco insider described the process called third party billing as “very, very dodgy,” reports the West Australian. However, it is technically legal. Telstra allegedly earned millions in revenue over the process. The source continued that although the company is bombarded with complaints from furious customers, it would not abandon the practice because it nets about 30 percent of revenues from each subscription.

Third party billing is the process when mobile owners unwittingly sign up to a subscription service by clicking an ad or link on their screen, therefore prompting a charge on their phone bills. The website doesn’t ask for credit card details to charge the customers; instead, the cost is incurred automatically in their phone bills. Customers claimed they were billed from $5 to $4,000 over the questionable practice.

“On my 03Dec-02Jan bill, I have been charged $65.25 for ‘Third party purchases from Openmarket Pty. Ltd.’ These charges were for me receiving 14 text messages from a company I did not know or request any service from,” customer alantun0 complained in the Telstra support page.

“I have just received my Telstra bill and there is a third party charge from Openmarket Pty Ltd for 16 messages at a cost of $75.25,” another customer chrispip wrote. “From the conversation with Telstra, I believe they are aware of this company and the scam it is operating but this was not directly admitted. However, given the information I have found on the web, they are aware of this scam. Telstra’s line of reply was that it must all be my fault.”

Telstra’s response to all the complaints was simple: The customers can stop the subscription to the “Premium SMS services” by filling out an online form.

It’s not just Telstra that has employed third party billing. Optus and Vodafone also engage in the process. However, unlike Telstra, which utilise a “one click opt-in” method of subscription acceptance, the two telcos require the customers two or more clicks before they can be charged.

A spokesperson from Telstra, meanwhile, acknowledged the issue, telling the New Daily that it is now in the process of implementing a “double opt-in process.”

“If a customer has a concern about a third-party purchase on their bill, we ask them to contact the third-party service provider’s customer helpline, in accordance with the complaint handling procedures regulated under the ‘Mobile Premium Services Code,’” the rep said. “If a customer is not able to reach a third-party provider’s helpline or is not satisfied with their service, we can provide assistance and facilitate refunds working back with the provider.”