PDB service: Telstra offers refunds after customers are hit with unauthorised charges

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A woman uses a Telstra public phone in suburban Sydney, August 9, 2012.
A woman uses a Telstra public phone in suburban Sydney, August 9, 2012. Reuters/Daniel Munoz

Telstra has admitted that the number of complaints received is a sign that there are issues with its Premium Direct Billing (PDB) service in need of addressing. Over 100,000 Telstra customers may have been charged for content they did not intend to sign up for.

Thousands of customers were unknowingly charged for content such as ringtones and games. They may also have been signed up to subscription services. "It is clear for this specific type of service, we did not get that right," Telstra executive Vicki Brady said in a statement. The telco added that it completely exited the service earlier this month.

Brady said that Telstra apologises to those who were unknowingly charged for PDB subscription services. The company has agreed to contact impacted customers and offer refunds. Based on estimates, at least $5 million in refunds had already been provided.

The Australian Competition and Consumer Commission (ACCC) started proceedings against the telecommunications company on Monday. The ACCC argued that the telco made misleading or false statements to customers. The Federal Court is yet to decide on final orders, with some reports claiming that the penalty could total $10 million.

In a statement, the ACCC said the telco was aware since early 2015 that the service led to a huge number of people being charged for content they did not consent to or have no knowledge with. “Telstra has admitted that it misled customers by charging them for digital content, such as games and ringtones, which they unknowingly purchased,” ACCC Chairman Rod Sims said in a statement.

Sims added that many customers who contacted the company were directed to third parties despite Telstra knowing that they had difficulty getting a refund from third-party suppliers or cancelling their subscription. The ACCC proceedings allege that the telecommunications company’s conduct contravenes the ASIC Act.

Australia's competition regulator encouraged Telstra customers to check their mobile accounts. Those who believe that unauthorised charges were applied under the PDB service are encouraged to contact Telstra for a refund.

The telco has agreed to directly deal with complaints regarding the PDB service. It will provide refunds where it is obvious that the customer had signed up to PDB content without their consent. The company has also agreed to contact and offer refunds to impacted customers that have already complained to Telstra directly or to the Telecommunications Industry Ombudsman (TIO) regarding subscription charges under the PDB service.