Optus forks out $12 million to customers over direct carrier billing

Telco likely to face $10 million fine

Credit: Dreamstime

Optus has refunded some $12 million to around 240,000 of its customers over its so-called ‘Direct Carrier Billing’ service.

Third party providers who used the Optus service have refunded around $19 million to the telco’s customers, the Australian Competition and Consumer Commission (ACCC) said today.

The DCB service allowed Optus customers to purchase premium services and content, such as games and ringtones, and have the charges automatically applied to their phone bill.

Optus said fees were levied for a range of services including access to some news websites, downloadable applications and ‘voting’ in some TV programs, and didn’t include purchases through the Optus Smart Shop or app stores. The service also didn’t cover Premium SMS, Infocall, and Optus branded media products.

The ACCC has launched Federal Court proceedings seeking a $10 million penalty against the telco. Optus has admitted it fell afoul of the ASIC Act and has backed the fine sought by the ACCC. The court will have to sign-off on the fine.

Optus has operated a DCB service since May 2012. In August this year it ended the service as part of an agreement reached with the ACCC.

“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,” Sims said in a statement.

“There was compelling need for safeguards to be put in place to stop customers paying for content like ringtones and games that they did not want, did not use, and had difficulty unsubscribing from, and Optus just ignored this.”

“We acknowledge that some customers may have inadvertently subscribed to content they did not want or could not easily unsubscribe from,” said Optus’ vice-president for regulatory and public affairs, Andrew Sheridan.

“Optus has committed to undertake a comprehensive review of customers affected by this activity and to provide refunds where appropriate, taking into consideration the fact that some customers may already have been refunded.

“We apologise to our customers and will communicate with affected customers and encourage them to contact Optus to discuss their circumstances,” the Optus executive said; customers are able to contact Optus via its Complaints Handling Form by phoning 1300 720 225 or through its Managing Third Party Content web page.

In March, the ACCC announced that Telstra had agreed to pay a $10 million fine over its Premium Direct Billing service, which functioned in a similar fashion.

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Tags TelecommunicationsoptusAustralian Competition and Consumer Commission (ACCC)

More about Australian Competition and Consumer CommissionCarrierOptusPremiumSmart

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