Telstra Ordered to Pay $18 Million to Customers Switched to Lower Internet Speeds

Telstra moved almost 9,000 customers to a plan with a slower upload speed without telling them.

A Telstra logo is seen as pedestrian walk outside the Telstra Melbourne headquarters in Melbourne, Australia on June 14, 2017 Michael Dodge/Getty Images

The Federal Court has ordered telecommunications giant Telstra to pay $18 million for breaching Australian Consumer Law by transferring almost 9,000 customers to lower speed plans without notifying them.

According to the Australian Competition and Consumer Commission (ACCC), Telstra had moved 8,897 “Belong” customers from a plan with a maximum uploaded speed of 40 Mbps to one with only half that during October and November 2020.

Despite the exact same download speed of 100 Mbps applying across both plans, the move was considered deceptive because consumers were not informed about the change in upload speeds at the time they were switched over.

“The $18 million penalty sends a strong message to all businesses that they cannot mislead consumers by making changes to key aspects of a service without informing customers of those changes,” ACCC Commissioner Anna Brakey said in a statement.

The court has also ordered that affected customers be reimbursed with a credit or payment of $15 for each month they had unknowingly been on the lower upload plan—an order that will set Telstra back around $2.3 million.

Telstra had already started paying back some customers prior to the court’s ruling and will also cover the ACCC’s legal costs.

“Telstra’s failure to inform customers that their broadband service had been changed denied them the opportunity to decide whether the changed service was suitable for their needs,” Brakey said.

“Misleading pricing and claims in relation to essential services, with a particular focus on telecommunications, is one of ACCC’s current enforcement priorities.”

Belong was developed as a low-cost mobile and internet service provider in 2013.

Telstra Responds

A Telstra spokesperson told The Epoch Times the company was “focused on doing better.”

“We accept the court’s findings and have worked constructively with the ACCC to resolve the matter,” they said.

“We should have notified customers about the changes to their services, and we’re sorry we let them down.”

Telstra says a number of steps have been taken to address the issue, including having remediated one group of customers while working on another.

“We have contacted all affected customers—whether they’re still with us or not—to ensure they have an opportunity to access remediation,” the spokesperson said.

“We’ve also offered, and the ACCC has accepted, an enforceable undertaking to formalise the steps we were already taking.

“We’re focused on doing better for our customers, and we’ve worked hard to strengthen our compliance processes and practices.”