ACMA warns Telstra on billing accuracy

The Australian Communications and Media Authority (ACMA) has formally warned Telstra for breaching the Telecommunications Consumer Protection Code 2007 (TCP Code).
Between 2006 and 2012 Telstra incorrectly billed over 260,000 international data roaming customers multiple flag fall fees for single data sessions, amounting to a total overcharge of around $30 million. The incorrect bills were based on incorrect information Telstra received from international carriers and its contracted data clearing house.
The TCP Code requires providers to bill customers accurately, subject to certain exceptions, including where the inaccuracy is caused by reliance on information provided by contractors.
The ACMA investigation found that Telstra could rely on this exception only until early 2009, when Telstra first received a complaint from a consumer who had been incorrectly billed for multiple overseas data sessions. That first complaint put Telstra on notice as to the incorrect billing information provided by its contractor and all billing inaccuracies after that point in time could be attributed to Telstra’s failure to investigate and identify those problems and correct its billing practices accordingly. The decision reflects the vital importance of accurate billing in the consumer / telco relationship.
‘Accurate billing is of the utmost importance’ said ACMA Chairman, Chris Chapman. ‘Our investigation makes it very clear that all telcos need to listen to their customers who report billing problems and be vigilant about any potential issues with the information provided to them by third parties.’
The ACMA’s decision to formally warn Telstra for the breach took into account the facts that Telstra was not the original cause of the problem; that this was the first time a billing issue of this nature had been investigated under the TCP Code; that Telstra itself reported the matter; and that Telstra appears to be otherwise currently compliant with the relevant parts of the TCP Code 2012. Importantly, Telstra proactively implemented a comprehensive program of compensation that mitigated the harm for affected customers.
The ACMA cannot, itself, impose penalties or require refunds in response to code breach findings.
Implications for businesses
While businesses may rely on information provided to them by third party contractors (such as international carriers or third parties providing services on their behalf) for billing purposes, they will no longer be able to rely on that information once put on notice of any problems or inaccuracies with that information, and remain responsible for ensuring their customers are billed accurately and fairly. Customer complaints should be taken seriously and investigated thoroughly, as they may put a telco on notice of any problems relating to third party information, making the telco responsible for correcting the information and its billing arrangements.
Since the new TCP Code was registered in September 2012, the ACMA has made over 330 inquiries with providers about TCP compliance issues, issued 8 Formal Warnings and Given 3 Directions to Comply, in relation to compliance with key new consumer protections – including new advertising rules, the requirement for Critical Information Statements and the requirement for providers to submit their own compliance assessments to industry body Communications Compliance.
The ACMA’s focus over the next quarter will be on checking compliance with the new requirement that telco providers notify customers on included value plans when they have used 50%, 85% and 100% of their included allowance.
For more information, please contact Anne-Marie Allgrove and Toby Patten.