Australian Competition and Consumer Commission v Telstra Corporation Limited
Citation: [2018] FCA 571
At a glance
- Penalty
- $10,000,000
What happened
The Australian Competition and Consumer Commission (ACCC) sued Telstra Corporation Limited over its Premium Direct Billing Service (PDB service). This service allowed customers to purchase digital content from third-party providers, with charges billed directly to their Telstra accounts. Many customers unknowingly incurred these charges without consent. Telstra did not require customer verification for purchases. The ACCC alleged that Telstra made false or misleading representations about the PDB service, violating consumer protection laws.
What was decided
The Federal Court declared the PDB service a financial service under the Australian Securities and Investments Commission Act 2001 (ASIC Act). The court found Telstra made false or misleading representations to customers regarding subscriptions, barring services, and unsubscribing. Telstra was ordered to pay $10 million in pecuniary penalties ($7 million for misrepresentation about consent, $1 million each for misleading information on barring and unsubscribing, and another $1 million for misleading statements about new mobile numbers). The court also ordered Telstra to pay the ACCC’s legal costs.
What it means for employers
Employers offering services with third-party billing must ensure customers fully understand how charges are applied. Clear communication and verification processes are crucial to avoid misleading representations and potential legal action. Telstra's commitment to cease the PDB service highlights the importance of regularly reviewing business practices to comply with consumer protection laws.
What it means for employees
Employees should be aware of their employer’s obligations regarding clear and accurate information about services, particularly those involving third-party billing. Customers have a right to understand how they are being charged and to easily opt out of unwanted subscriptions. This case underscores the importance of transparency in business dealings.
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This summary was drafted from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections