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Telstra to refund $25M for under-performing internet speeds

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Telstra to refund $25M for under-performing internet speeds

Telstra has been ordered to refund around $25 million to thousands of its customers after making them pay for services the company’s NBN infrastructure could not bring. 

The Australian Communications and Media Authority (ACMA) investigated the company and found that it had failed to suitably notify up to 49,092 affected customers of their under-performing internet speeds and plan options between September 2018 and October 2020. 

“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.” 

The ACMA has issued Telstra with a Remedial Direction, ordering them to commission an independent audit of the systems it has in place to notify customers of their maximum attainable speeds. 

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

Under ACMA rules, telcos must verify maximum internet speeds and notify customers when speeds cannot meet those advertised in their plan.  

In these circumstances, customers are entitled to move to a lower speed tier plan at a lower price or exit the contract without cost. 

Telstra is currently in the process of providing remedies to the impacted customers, including providing around $25 million in refunds. This refund comprises additional cases not included in the ACMA’s findings. 

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

“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,” ACMA Chair O’Loughlin said. 

Telstra is reporting regularly to the ACMA on its refunding progress. If they fail to comply with the Remedial Direction, they could face penalties of up to $10 million. 

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