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Telstra accused of ‘scamming’ customers

KKO Store, a provider of games and ringtones, is mentioned in many complaints about third party billing.

KKO Store, a provider of games and ringtones, is mentioned in many complaints about third party billing.

Hundreds of Telstra customers claim they’ve been hit by a phone billing “scam” that sees consumers unknowingly charged after just one click on a pop-up website or online advert.

Furious mobile phone users have taken to Telstra’s crowd support web portal in droves to complain about the legal practice known as ‘third party billing’.

Third party billing happens when mobile owners unknowingly sign up to a subscription service – triggering a phone bill charge – by clicking on an ad or a website that appears on their screen.

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Customers claimed on the forum to have been unfairly charged from $6 to as much as $4000.

Many argued it was too easy to accidentally subscribe and incur charges because a single click added expenses to their phone bill automatically, rather than asking for credit card details.

Telstra

Telstra is not the only company using the practice. Photo: Getty

“On my December to January bill, I have been charged $65.25 for ‘Third party purchases’ from ‘Openmarket Pty. Ltd.’,” user alantun0 wrote.

“These charges were for me receiving 14 text messages from a company I did not know or request any service from. I have complained at my local Telstra shop and been told that the charges were linked to my ‘Premium SMS’ service – a service I never requested from Telstra.”

Like many of their responses, Telstra replied to the user by advising: “You can request a barring of access to Premium SMS services.” The company requires residential customers to fill out an online form to bar this service.

A Telstra spokesperson confirmed to The New Daily that the company had “arrangements” in place with a “small number of service providers”, and that it would be changing its third party subscription policy to ensure consumers had to click more than once to be charged.

(Click on the owl to read Telstra’s full statement on the matter  ).

Controversy surrounding the practice erupted as the telco battled to repair its image following its mobile coverage dropout saga.

But it’s not just Telstra customers who are affected by the practice – Optus and Vodafone also engage in third party billing, however those telcos required two or more clicks for a consumer to be charged, unlike once for Telstra.

The Telecommunications Industry Ombudsman found in its latest annual report that complaints it received about third party billing rose by 29.9 per cent to almost 2000 in 2015.

kko store

KKO Store, a provider of games and ringtones, is mentioned in many complaints about third party billing.

“In some cases, when consumers try to get refunds or unsubscribe, their provider might ask them to contact the content provider,” the report found.

“Consumers come to us after being unable to contact these providers, which in some cases are overseas.”

It also reported the practice had been going on for years across the whole industry, but that the recent spike was a cause for concern. 

A telco insider the West Australian that Telstra and other companies would not abandon the practice because it was too lucrative.

“The one-click process had netted Telstra multimillion-dollar windfalls, with the telco getting about 30 per cent of revenues from each subscription,” the unnamed source said, according to the newspaper.

Telstra was forced to compensate customers with free data after two national mobile phone network outages in February and March this year.

Many customers took full advantage of the day, downloading large amounts of content to chew through the data.

It was also criticised for publicly withdrawing its advocacy for same-sex marriage, and then re-committing after copping backlash.

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