Bill shock set to cost telco $10m

Optus looks set to be hit with a $10 million penalty after charging customers for games and ringtones they hadn’t knowingly requested.

The Australian Competition and Consumer Commission (ACCC)  said the practice continued for at least four years, even though the telco received 600,000 direct inquiries about the charges.

Optus has committed to offer refunds to more than 240,000 customers affected by the charges.

The breaches were in relation to Optus’s third-party billing service known as Direct Carrier Billing (DCB). Optus has admitted it was aware, from at least April 2014, that its DCB service led “a significant number of customers” to be charged for premium content such as ringtones, games, horoscopes, etc. that they did not want and had not agreed to buy.

Optus also admitted that it failed to adequately inform customers the service was a default account setting and that if customers received premium content via their phone, even unintentionally, Optus would bill them for it.

ACCC chair Rod Sims said: “A substantial number of Optus customers were signed up to subscriptions for expensive, often unwanted content without being required to enter payment details or verify their identity, as occurs with many other online purchases.

“Many customers didn’t realise they were signing up to anything at all, and in some cases family members such as children incurred these charges without the account holder’s knowledge.

“Despite over 600,000 direct inquiries Optus received over a number of years about this DCB service, Optus chose to continue to generate major profits at the expense of basic consumer protections.

“There was compelling need for safeguards to be put in place to stop customers paying for content like ringtones and games that they did not want, did not use, and had difficulty unsubscribing from, and Optus just ignored this,” Mr Sims said.

Optus has admitted it made false or misleading representations in contravention of the ASIC Act and has agreed to apply jointly with the ACCC for orders from the Federal Court.

The proposed orders include declarations that Optus breached the ASIC Act and for Optus to pay $10 million in penalties. The Federal Court is yet to decide whether the proposed penalties are appropriate.

Optus agreed to cease offering the DCB service on 24 August 2018.

In similar court action, Telstra was ordered to pay $10 million in penalties over its Premium Direct Billing (PDB) service.

Mr Sims said: “The ACCC is continuing its investigation into third-party billing services by other carriers, and further enforcement action may well follow.”

Are you an Optus customer? Were you inadvertently charged for content you did not request? Have you received a refund?

Related articles:
Telstra ends third-party bill shock
Optus admits customers in the slow lane
Internet complaints through the roof

Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.

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