Mobile telco Vodafone has admitted to making false and misleading representations about its third-party direct carrier billing services and will contact and refund impacted customers.
This follows as ACCC investigation, which was completed under a delegation of the Australian Securities and Investments Commission’s (ASIC) powers.
The telco said that it likely breached the ASIC Act from at least 2015 by charging consumers for content they had not agreed to buy or had purchased unknowingly.
The ACCC said on Tuesday that Vodafone has given a court-enforceable undertaking relating to the billing service, which charged Vodafone customers for ringtones, games and other digital content provided by third parties.
Vodafone’s direct carrier billing service, which ran from January 1, 2013 to March 1, 2018, was automatically enabled on the telco’s customers’ mobile accounts and purchases could occur with as little as one or two clicks.
The purchases would then be charged on the customers’ next Vodafone bill. The content was marketed and provided by third parties who paid Vodafone commissions for sales to its customers.
Vodafone received an increase in complaints about the service during 2014 and 2015. As a result, it began phasing out subscriptions in mid-2015 and cancelled its arrangements with certain third party digital content providers. However, consumers could still be charged for one-off purchases without any identity verification until March 2018.
“Through this service, thousands of Vodafone customers ended up being charged for content that they did not want or need and were completely unaware that they had purchase,” said ACCC chair Rod Sims.
Vodafone said it would contact potentially affected customer and offer refunds where appropriate. It will also review any complaints and deal with those customers in good faith.
“Other companies should not, money made by misleading consumers will need to be repaid,” Sims said.
Follow CIO Australia on Twitter and Like us on Facebook… Twitter: @CIO_Australia, Facebook: CIO Australia, or take part in the CIO conversation on LinkedIn: CIO Australia
Follow Byron Connolly on Twitter: @ByronConnolly
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.