Telstra to pay $25 million in refunds for slow internet speeds

Telstra will pay $25 million in refunds to almost 50,000 customers after it failed to notify them that they were receiving slower than promised internet speeds.

Under rules set by the Australian Communications and Media Authority (ACMA), telecommunications companies must notify customers when speeds cannot meet those promised or advertised in the plan they were sold.

Around 50,000 Telstra customers were not informed that the maximum speeds advertised in their internet plan were not attainable with the NBN infrastructure available to them and they will be eligible for a refund as a result.

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These customers will also be entitled to move to a lower speed plan at a lower price or exit the contract without incurring any fees, charges or costs.

Telstra was also issued with a direction to conduct an independent audit of the systems it has in place to notify customers of their maximum attainable speeds.

ACMA chair Nerida O’Loughlin said an investigation found that between September 2018 and October 2020 Telstra failed to suitably notify up to 49,092 affected customers of their underperforming internet speeds and plan options.

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“ACMA is very concerned with this conduct as these customers have been paying for a level of service they were not receiving,” Ms O’Loughlin said.

“Telstra denied these customers the opportunity to downgrade their plan or exit their contract.”

Telstra is in the process of providing remedies to the affected customers, including providing refunds where appropriate.

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Telstra also breached rules that do not allow a telecommunications company to charge for an NBN service unless 10 working days have passed since customers were advised of their options and they have not taken up an available remedy.

ACMA has ordered Telstra to implement a range of systems, processes and reporting to assure the future compliance with these rules.

“We will take a very close look at the results of the independent audit to make sure we are satisfied that the action Telstra has taken will adequately address the flaws that led to the problems,” Ms O’Loughlin said.

If Telstra fails to comply with these directions, it could face penalties of up to $10 million.

Telstra’s global connectivity spokesperson, Sanjay Nayak, said the company was in the process of contacting all customers who have been affected to offer them appropriate remedies.

He said the company started the process of identifying the problem in February and would be contacting customers over the next few months.

“This is a complicated issue that we are managing proactively, and we are very sorry to have let these customers down,” Mr Nayak said.

“Since discovering these issues, we have made significant improvements to how we manage communicating NBN speed information to our customers.

“We’ve introduced a new system for processing the information we receive from NBN Co about customers’ maximum speeds, which lets us better match our data with NBN Co’s and detect when there are issues.”

Do you know if the internet speeds sold as part of your NBN plan are actually achievable in your situation? Do you think you will be one of the Telstra customers eligible for a refund? Will you be contacting Telstra to find out if you are eligible? Why not share your thoughts in the comments section below?

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Written by Ben