Optus customers refunded $31M over third-party billing services

ACCC seeks further $10 million in penalties

Optus has paid approximately $12 million to customers affected by its third-party billing services, with third party providers refunding another $19 million to Optus customers.

The $31 million refund was a result of investigations led by the Australian Competition and Consumer Commission (ACCC) over the direct carrier billing (DCB) service.

Optus has admitted to make misleading representations to consumers over its third-party billing service and agreed to refund more than 240,000 customers.

ACCC commenced proceedings against the telco, with Optus agreeing to jointly apply for orders from the Federal Court.

ACCC will argue that Optus breached the ASIC Act and request that Optus pays a $10 million penalty.

“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,” ACCC Chair Rod Sims said.

“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 enquiries 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,” Mr Sims said.

Optus admitted it was aware, from at least April 2014, its DCB service led a significant number of customers to be charged by Optus for premium content such as ringtones, games, horoscopes, etc. that they did not want and had not agreed to buy.

According to the ACCC, Optus also admitted that it failed to adequately inform customers the DCB service was a default account setting and that if customers received premium content via their phone, even unintentionally, they would be billed by Optus for it.

Optus is the second telecommunications provider to admit breaching the ASIC Act this year. In September, ACCC revealed that Telstra had refunded a total of $9.3 million to 72,000 customers for misleading customers over third-party billing services.

In March, the publicly-listed telco admitted it made false or misleading representations to 100,000 consumers in regards to the service with the ACCC revealing it was taking Telstra to court.

A month later, Telstra was ordered by the Federal Court to pay penalties of $10 million.

The ACCC investigations into third-party billing services by other carriers are continuing.