Telstra targeted in class action lawsuit over late fees

Legal firm also proposes action against Optus and Vodafone

Australia’s big three telcos are being targeted in class action lawsuits relating to late payment fees imposed on their customers.

ACA Lawyers on Wednesday launched a multi-million dollar class action lawsuit against Telstra.

The firm’s lawyers will argue that late payment fees charged by Telstra “represent an unlawful penalty” because they don’t reflect the actual loss to the company caused by the late payment.

The firm is also proposing to initiate class action lawsuits before the end of the year against Optus and Vodafone and has called for customers wishing to participate to register here.

This follows a recent court decision which found that late payment fees charged by banks are unlawful and that clients are entitled to get most of their money back.

“We will argue this is the same for the late payment fees charged by Telstra, Optus and Vodafone,” said Steven Lewis, principal with ACA Lawyers.

Lewis said the action was about justice for the clients of Australia’s major telecommunications companies.

“Last week Telstra announced a massive profit which is built in part on revenue from late payment fees often collected from families who can least afford it,” he said.

A Telstra spokesperson said: "We will review the claim when we receive it. We believe our late payment fees are reasonable in light of the costs we incur and we will strongly defend any claim we receive."

Telstra charges a $15 late fee if the amount outstanding on a bill is $70 or more. This is up from a flat fee of $5 when the charged was introduced in May 2000, the law firm said.

Optus charges its mobile customers late fees of $15 if the amount outstanding is between $50 and $100, and $15 plus interest if the amount outstanding is more than $100. Vodafone charges a late fee of $10 regardless of the amount outstanding, the firm said.

Telstra posted an after-tax profit of $4.28 billion for the past financial year, which included $272 million from ‘late fees and other miscellaneous fees.’

The telco’s accounts for the four years from July 2009 indicate that the company may have collected a further $500 million in late and miscellaneous fees over the those years.

The Telstra class action is being backed by UK-based litigation funder, Harbour Litigation Funding.

Telstra, Optus and Vodafone clients who have paid a late fee within the past six years are entitled to join the actions.

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Follow Byron Connolly on Twitter:@ByronConnolly

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