Telstra error leads to delayed $11 million payout for customers

The Australian Communications and Media Authority (ACMA) has again called out Telstra for compliance failures, after the telco delayed paying customers more than $11 million in compensation.

The ACMA launched an investigation into Telstra’s conduct regarding compensation owed to its customers for faulty landline connections or late repairs in the period between July 2017 and June 2021. According to the ACMA, Telstra failed to compensate more than 67,000 customers in the required 14-day timeframe, leading to a failure to comply with telco obligations outlined in the Telecommunications (Consumer Protection and Service Standards) Act 1999.

ACMA: Telstra ‘let down’ customers despite self-reporting issue

Telstra initially self-reported the issue to the ACMA in April 2021, after which the telco identified further instances where Customer Service Guarantee payments had not been made. Industry rules state that telcos are liable to pay damages when performance standards are not met; in this case, Telstra did not accept its responsibility to compensate affected customers within 14 days.

While the affected customers have now all been fully paid by Telstra, and the telco has entered into a court enforceable undertaking to improve its internal systems and prevent further breaches, ACMA Chair Nerida O’Loughlin said customers have been ‘let down’ by the compliance failure.

“Telstra knows it has had a problem with its internal systems and processes, uncovered through its T22 business strategy. The company has self-reported this and other recent breaches,” said Ms. O’Loughlin.

“It is critical that Telstra addresses these longstanding issues in building new systems and processes and, where it is obligated to, compensates its customers for historical breaches of telco rules.

“The ACMA will continue to monitor Telstra’s progress on its work to update systems and processes so that future non-compliance and the associated negative outcomes for consumers are a thing of the past.”

Telstra pays customers in full, vows to improve systems

Telstra has stated that the delayed payments were due to IT problems, and that it is working to update its processes to prevent future compliance breaches. The telco will also be appointing an independent reviewer as part of the enforceable undertaking.

“We have now made these payments, and entered into the undertaking with ACMA announced today,” said a Telstra spokesperson.

“We deal with millions of customer transactions weekly however this is clearly not the experience we want to be providing our customers. We are in the process of improving the system to better automate the payments.”

Last month Telstra paid out $1.73 million in refunds, plus a $500,000-plus fine, after failing to comply with industry billing rules and overcharging customers. The telco was also hit with a $25 million remedial direction in July 2021, when the ACMA found it did not inform almost 50,000 NBN customers that their broadband plans could not achieve the advertised maximum speed.

Telstra also attributed these recent missteps to billing system errors, and self-reported both the above issues to the ACMA.

While multiple breaches isn’t a great look for Telstra, it’s not the only telco to break industry rules this year. In March, TPG and Optus also issued multi-million dollar refunds to customers on under-performing NBN plans.

Phone and internet billing or service errors can happen with any provider, so it’s a timely reminder to be across how much you’re paying for your telco plan and the performance you should be receiving. Don’t hesitate to contact your telco if something isn’t right, and to follow up on complaints to ensure your provider is held accountable for dropping the ball.

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