Wednesday, 2 May 2018

Q. If Telstra steals est. $60 million, repays $5 million in compensation and is fined $10 million, leaving a profit of $45 million - how big are the telco’s performance bonuses this year?

Readers with a Telstra mobile phone account need to check that their phone was not set to ‘Premium Direct Billing’ before 3 March 2018.

Because although Telstra put out a media release there was no promise to proactively contact all mobile customers with this news below and, the telco will be be deciding which individual account holders (who have been overcharged for a service they did not consent to) will be contacted concerning compensation.

It is possible it will not manage to contact every customer who had been improperly charged. So if you suspect that you may have been then phone Telstra.

New Matilda, 27 April 2018: 
Ordinarily, when you get caught stealing, you have to pay the money back, and the punishment you receive is meant to dissuade you from stealing again.

Unless you’re a major Australian corporation. In which case, you can steal tens of millions of dollars from your ‘valued clients’, pay a fine that represents a tiny proportion of what you pinched, issue a few million in refunds… and then keep the rest.

Introducing Telstra and its third-party ‘Premium Direct Billing’ scam, which netted Australia’s biggest Telco a cool $45 million profit, after fines and refunds.

Yesterday, the Federal Court fined Telstra $10 million for the rip-off after it found that Telstra “did not adequately inform customers it had set the Premium Direct Billing service as a default on their mobile accounts. If customers accessed content through this service, even unintentionally, they were billed directly by Telstra”.

“Thousands of Telstra mobile phone customers unwittingly signed up to subscriptions without being required to enter payment details or verify their identity.

By introducing and operating the Premium Direct Billing service, Telstra generated substantial profits by exposing customers to unauthorised charges,” Chairman of the Australian Competition and Consumer Commission Rod Sims announced in a media statement.

The prosecution was launched by the ACCC with powers delegated from the Australian Securities & Investments Commission. You might remember that sleepy Australian corporate watchdog from such scandals as the banking royal commission....

“Telstra estimates it has provided refunds of at least $5 million, and it will review any future complaints in light of this action and deal with those customers in good faith. The ACCC estimates further refunds may be in the order of several million dollars.”

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