Optus slapped with $10 million fine over third-party bills

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Optus slapped with $10 million fine over third-party bills

Optus has been fined $10 million by the Federal Court for charging customers for services from third parties without their knowledge via its controversial direct carrier billing service.

Direct billing services allow third parties to sell games, ringtones and other digital content and bill customers directly to their phone bill, often without the customer's knowledge or consent.

Optus received over 600,000 enquiries from customers about the service but failed to implement appropriate identity safeguards. According to the Australian Competition and Consumer Commission (ACCC) purchases could be made with just one or two clicks from a web browser in some instances.

The ACCC estimates Optus customers were charged approximately $195 million they may not have intentionally purchased since 2012, of which Optus earned approximately $65.8 million in commissions. Optus ended the service in 2017.

ACCC commenced proceedings against Optus in October last year, claiming the telco breached the ASIC Act by not properly informing customers that direct billing services were selected as a default setting on their accounts, or telling them they would be billed for content they accidentally purchased. Optus admitted to the allegations.

“Optus failed to take appropriate action, choosing instead to continue to charge customers and collect commissions on these sales, even after numerous complaints," ACCC chair Rod Sims said.

“We are pleased that the court agreed that this conduct is simply unacceptable, and deserves a significant penalty."

So far, Optus has refunded 240,000 customers for their unwanted bills, paying approximately $8 million in customer refunds and $13 million to third party providers. The ACCC said there were likely more affected customers that still haven't received refunds given the number of enquiries.

The ACCC said that Optus has committed to contacting affected customers that haven't been refunded, and would identify those that were incorrectly charged and will deal with future complaints in good faith.

The fine matches Telstra's last year, who was also penalised for its own third-party billing practices. Telstra was fined $10 million and paid back $9.3 million in refunds to 72,000 customers as of September 2018.

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