Vodafone is the latest telco to be hit with action over its direct carrier billing service which unknowingly charged customers for digital products.
Direct billing services (DCB) allow third parties to sell digital content like games and ringtones and charge customers directly to their phone bill, often without their knowledge or consent. In Vodafone’s case, DCBs were automatically enabled on customer accounts, meaning purchases could be made with just one or two unwitting clicks.
The telco admitted it likely breached the ASIC Act by charging customers for products they hadn’t agreed to purchase, and will contact and refund affected customers.
“Through this service, thousands of Vodafone customers ended up being charged for content that they did not want or need, and were completely unaware that they had purchased,” said ACCC chair Rod Sims.
“Other companies should note, money made by misleading consumers will need to be repaid.”
Vodafone has agreed to offer refunds where appropriate and will review any complaints to deal with them in good faith.
Vodafone launched its DBC services in January 2013 but started phasing them out in mid-2015 after complaints started to mount. However, customers could still be charged for one-off purchases without any identification up until 1 March 2018.
Australia’s two largest telcos Telstra and Optus have already been stung for similar practices.
Earlier this year, Optus was fined $10 million for its own DCB services after refunding 240,000 customers for their unwanted bills. Optus paid out approximately $8 million in customer refunds and $13 million to third party providers. The ACCC estimates Optus charged customers approximately $195 million in third party bills, earning $65.8 million in commissions between 2012 and 2017.
Telstra was also fined $10 million for the same transgression, handing back $9.3 million in refunds to 72,000 customers last year.
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