Telstra has paid a $3 million penalty and refunded $17.7 million to thousands of customers after charging them for inactive internet services during an 11-year period.
A further $3.4 million is to be refunded by the end of the year.
An Australian Communications and Media Authority (ACMA) investigation found that 6,532 customers, the majority of whom were small businesses, were wrongly billed by Telstra an average of around $2,600 between April 2012 and August 2023.
By wrongly charging these customers, Telstra breached customer billing accuracy rules under the Telecommunications Consumer Protections (TCP) Code, as well as breaching a formal ACMA direction to comply with the Code given in 2020.
In September 2020 the ACMA directed Telstra to comply with billing accuracy rules after it overcharged more than 10,000 customers almost $2.5 million over a 12-year period.
This was followed by another investigation in 2022 that found Telstra overcharged more than 11,000 customers by around $1.7 million.
ACMA Chair Nerida O’Loughlin said the ACMA has lost patience with Telstra after this series of significant billing errors.
“Telstra has a history of incorrectly billing customers and it’s just not good enough,” O’Loughlin said.
"All telcos must have robust billing systems in place to ensure that consumers, including small businesses, are only paying for agreed and active services.”
Telstra told the ACMA the billing issues were caused by the company failing to follow a series of steps in its ADSL internet service deactivation process.
“Telstra is a major player in the Australian telco sector and it needs to continue to prioritise its billing compliance and get its systems in order,” O’Loughlin said.
Telstra global business services group executive Dean Salter said it has reached out to customers to explain what went wrong and what it was doing to fix it, including refunding the incorrect charges with interest.
"Getting something as important as billing wrong isn’t acceptable, and this is clearly not the experience we want to be providing our customers," Salter said.
"These ADSL billing errors occurred because we didn’t follow the proper deactivation process, including when some customers migrated to the NBN, which resulted in some customers being charged for inactive services.
"We know our customers deserve better, which is why we reported the issue to ACMA and conducted our own extensive investigation."
Salter said it had new controls in place to prevent this issue from happening again, including monthly checks if ADSL services are being used by customers before they’re billed.
Telstra has also agreed to report to the ACMA in six months about the effectiveness of these controls.
Further contraventions of the billing accuracy rules could lead to the ACMA taking further action, including commencing proceedings in the Federal Court.