Unaccounted costs for SMEs: Telstra fined $3 million for overcharging customers

Telstra is paying the price after being caught overcharging customers for the third time since 2020.

The telco giant will refund $21 million to consumers charged for inactive internet services across an 11-year period, at an average of about $2,600 a customer.

The Australian Communications and Media Authority (ACMA) also stung Telstra with a $3 million fine for breaching customer billing accuracy rules and breaking its direction to comply with its code after a similar issue in 2020.

The authority says most of the 6,532 customers overcharged between 2012 and 2023 were small businesses.

Its boss Nerida O’Loughlin was scathing in her assessment of Telstra’s conduct, saying her organisation had “lost patience” after the third recent breach.

In 2020, Telstra was caught overcharging customers almost $2.5 million across 12 years, before overcharging another $1.7 million in 2022.

“Telstra has a history of incorrectly billing customers, and it’s just not good enough,” O’Loughlin said in a statement.

“At a time when many small businesses are facing economic pressures, unaccounted costs can create very real stress and financial hardship.”

Telstra said it hadn’t followed a series of steps in its ADSL internet deactivation process.

It has since implemented controls to stop the issues from recurring and will report to ACMA in six months about the effectiveness.

Telstra executive Dean Salter acknowledged getting billing wrong “isn’t acceptable” and apologised to the affected customers.

Telstra reported the issue to ACMA and has refunded all but $3 million of the $21 million needing to be repaid.

“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,” Salter said in a statement.

“We’ve reached out to our customers to explain what went wrong and what we’re doing to fix it, including refunding them for the incorrect charges with interest … we’ve let these customers down, we apologise for this, and it’s clear we need to do better.”

This article was first published by AAP.