Telstra submits to ACCC’s penalty for misleading mobile direct-billing service

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UPDATE: Telstra has now officially been fined $10 million by the Federal Court, despite the PDB service being responsible for the telco making $61.7 million in revenue. Original article continues below

Telstra’s controversial Premium Direct Billing (PDB) service will cost the company upwards of $10 million dollars in penalties from the ACCC, on top of refunds to affected customers that were misled by the service, according to a new statement from the Australian telco. 

The PDB service allowed Telstra customers to purchase or subscribe to third-party services such as games, apps and videos and have their costs charged directly to their mobile bill. The PDB purchase process was intentionally simplified and didn’t require payment details or identity verification.

While intended as a feature that improved convenience for consumers, many users complained when they found themselves paying for products they didn’t intend to, or subscribed to services that they couldn’t exit from. Those complaints lead the ACCC to take the telco to court, with the end result being that Telstra has cancelled the service effective of March 3.

What to expect

Telstra claims it has already paid out $5 million worth of refunds to customers who’d complained about unwarranted PDB charges, and the ACCC estimates a further ‘several million dollars’ worth of refunds will be made. 

The telco has promised to contact any additional customers it believes to have been affected. If you’re a Telstra customer who’s experienced issues with PDB purchases and think you’re liable for reimbursement, you we’d advise getting in touch with the telco directly.

While the PDB program has already been discontinued for third-party companies, certain services that Telstra offers through its own partnerships will continue to be charged to mobile bills — which includes subscriptions from the likes of Netflix, Foxtel, Apple Music and more (for a full list, visit this Telstra page). 

As for customers with other network providers, a similar story may apply. Optus ended third-party charges on January 31, with a comparable list of exceptions to Telstra. Vodafone still offers its equivalent feature (which it calls Pay With Vodafone), which still allows the purchase of third-party products and services such as games and competitions.

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