ACCC takes Optus to court over carrier billing

The ACCC is taking Optus to court alleging that the operator misled customers in relation to its Direct Carrier Billing third-party billing service, a charge Optus has admitted to.

The ACCC will seek penalties including a $10 million fine and declaration that Optus breached the ASIC Act.

Optus has admitted to making false or misleading representations in contravention of the Act.

Specifically, Optus has admitted that from at least April 2014, its direct carrier billing service led a significant number of its customers to be charged for premium content that they did not want and had not agreed to buy.

The operator has agreed to apply jointly with the ACCC for the court orders. The operator has also agreed to refund customers affected by the conduct, which the regulator said could number more than 240,000.

Optus has already paid out $12 million in refunds to around 240,000 customers to date and compelled third-party providers to refund a further $19 million.

The company also admitted that it had failed to adequately inform customers that direct carrier billing was enabled by default and that they would be billed by Optus if they received premium mobile content on their phone, even unintentionally.

“A substantial number of Optus customers were signed up to subscriptions for expensive, often unwanted content without being required to enter payment details or verify their identity, as occurs with many other online purchases,” ACCC Chair Rod Sims said.

“Despite over 600,000 direct enquiries Optus received over a number of years about this DCB service, Optus chose to continue to generate major profits at the expense of basic consumer protections.”

Sims said Optus ignored the compelling need for safeguards to be put in place to prevent consumers from paying for content like ringtones and games that they did not want and had difficulty unsubscribing from.

The ACCC secured similar remedies against Telstra over its Premium Direct Billing service, including $10 million in penalties, and is investigating third-party billing services from other carriers.

Image credit: ©iStockphoto.com/DNY59

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