The Australian Communications and Media Authority (ACMA) has found Telstra kept nearly 50,000 customers on NBN plans at speeds it could not provide.
Before we get into this, it’s worth noting that the issue of not being able to reach the speeds promised isn’t rare or exclusive to Telstra. Many different factors can contribute to speed degradation that isn’t the fault of a telco.
But unfortunately, the issue can’t be identified until after a connection has been installed, which is why it’s so important that customers are notified promptly after the fact.
In a statement on Wednesday, ACMA clarified that Telstra kept 49,092 customers in the dark about the situation, failing to notify them that they could downgrade to a cheaper policy at speeds the company’s copper could actually meet.
“The ACMA is very concerned with this conduct as these customers have been paying for a level of service they were not receiving,” ACMA chair Nerida O’Loughlin said.
“Telstra denied these customers the opportunity to downgrade their plan or exit their contract.”
In total, Telstra is up for an estimated $25 million in refunds to customers impacted by the issue. However, a Telstra spokesperson clarified to Gizmodo Australia that this figure is not just for the 49,092 cases found – this also includes additional cases not included in the ACMA findings.
Telstra publicly admitted its fault last month in a press release, and it’s worth noting that the telco provider self-reported on the matter. However, the specifics of the situation weren’t revealed until the ACMA chimed in.
“We have become aware that we have failed to meet these commitments and rules for many customers. We’re now in the process of contacting all customers who have been potentially impacted to offer them appropriate remedies,” Telstra Executive Sanjay Nayak said in a statement.
“As we became aware of these issues, we reported them to the ACCC and the Australian Communications and Media Authority (ACMA) and have developed a comprehensive remediation programme. This programme started in February 2021 and we’ll contact customers over the next few months.”
In a statement to Gizmodo Australia, the telco giant also asserted that “this is happening more broadly in the industry and it is disappointing that the regulator as singled out Telstra and rewarded our self-reporting in this way.”
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Additionally, the ACMA confirmed that Telstra broke rules preventing telco providers from charging customers for 10 days after they’re given the choice to downgrade their plans.
As per consumer law, telcos cannot charge customers for a ten day period unless the customer has selected a course of action. Basically, the law is in place to prevent consumers copping a full bill in the interim.
According to the ACMA, Telstra could “face penalties of up to $10 million” if it fails to comply with the remedial direction the regulator handed down.
The news comes just months after Telstra copped a $1.5 million fine from the ACMA for failing to port phone numbers during COVID.