Telstra under fire for failure to report max speed restrictions to customers

Telstra is again under fire from the Australian Communications and Media Authority (ACMA), this time for failing to properly inform nearly 50,000 customers that they would not be able to achieve the maximum speeds advertised due to the NBN infrastructure they could access.

This year alone Telstra has received fines over landline porting and misleading Indigenous consumers, and was warned along with Optus and Aldi Mobile for failing to protect customer identities.

The ACMA asserted in a release that this is a breach of a rule that telcos should verify speeds and notify customers when their connection cannot meet the speeds advertised in their plan.

These customers are then entitled to move to a lower speed, lower priced plan without penalty.

The ACMA said it has issued a Remedial Direction to Telstra stating it must commission an independent audit of its systems for notifying customers about maximum attainable speeds.

ACMA Chair Nerida O’Loughlin said an investigation found that between September 2018 and October 2020 Telstra failed to suitably notify up to 49,092 affected customers of their under-performing internet speeds and plan options.

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

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

Telstra is undertaking efforts to remedy the issue, providing customers with refunds ‘where appropriate’, expected to reach around $25 million, including some cases not included in the ACMA’s findings.

The ACMA added that Telstra also breached rules that do not allow a telco to charge for an NBN service unless 10 working days have passed since customers were advised of their options and they have not taken up an available remedy.

Under the Remedial Direction, Telstra must also implement a range of systems, processes and reporting to assure future compliance with the ACMA rules, the Authority said.

“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,” O’Loughlin said.

Failure to comply with the Remedial Direction could result in a fine of up to $10 million.