Telstra to refund $25m over internet plans

Telstra failed to inform almost 50,000 people that maximum internet speeds weren't attainable.
Camera IconTelstra failed to inform almost 50,000 people that maximum internet speeds weren't attainable. Credit: AAP

Telstra is refunding more than $25 million to customers after a regulator found it failed to inform almost 50,000 people that the maximum speeds advertised in their internet plans weren’t attainable.

The Australian Communications and Media Authority has announced it is issuing the telecommunications giant with a remedial direction.

An ACMA investigation found between September 2018 and October 2020 Telstra failed to suitably notify up to 49,092 customers of their under-performing internet speeds and plan options.

Under ACMA rules, telecommunication companies must verify maximum internet speeds and notify customers when speeds cannot meet those advertised in their plan.

In those circumstances, customers are entitled to move to a lower speed tier plan at a cheaper price or exit the contract without cost.

“The ACMA is very concerned with this conduct as these customers have been paying for a level of service they were not receiving,” ACMA chair Nerida O’Loughlin said in a statement on Wednesday.

“Telstra denied these customers the opportunity to downgrade their plan or exit their contract.”

The ACMA expects Telstra to dish out around $25 million in refunds. That figure includes other cases not included in the watchdog investigation.

Telstra also breached rules that do not allow a telco to charge for an NBN service unless ten working days have passed since customers were advised of their options and they have not taken up an available remedy.

Under the ACMA direction, Telstra must commission an independent audit of the systems it uses to notify customers of their maximum attainable speeds.

The company must also implement a range of processes and reporting to assure future compliance with ACMA rules.

“We will take a very close look at the results of the independent audit to make sure we are satisfied that the action Telstra has taken will adequately address the flaws that led to the problems,” Ms O’Loughlin said.

Telstra faces penalties of up to $10 million if it doesn’t comply with the direction.

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