Telecom company pays for mistake

PUBLISHED : Thursday, 19 September, 1996, 12:00am
UPDATED : Thursday, 19 September, 1996, 12:00am

The reputation of the nationally-owned telecommunications company, Telstra, has been severely bruised by a row over hidden charges.


The Australian Competition and Consumer Commission found Telstra practised 'deceptive and misleading conduct' after the company charged nearly 1.6 million subscribers a massive A$45 million (HK$275 million) in fees without their knowledge since 1989.


The case comes as the national giant faces stiff competition ahead of deregulation of the telecommunications industry, and after its triumphant claim to be Australia's most profitable company.


The commission said Telstra's misconduct related to its charging and raising a wire repair fee to consumers without informing them.


The fee - at first a monthly payment of 50 Australian cents - was part of what Telstra referred to as its Wire Repair Plan, under which it maintained and insured the repairing of telephone extensions in Australian homes and small businesses.


It did not inform customers of the fee when it was first introduced in 1989, nor of an increase to 60 cents in 1992. When Telstra sent out notices advising of a further increase to 95 cents, the commission was deluged with complaints from phone users saying they were unaware the charge was being billed in the first place.


A Telstra spokesman conceded the charge was a mistake, but maintained it was because of naivety and not a desire to swindle people.


Now almost every Australian with a telephone extension will receive an average payout of A$28. The wire repair service will be free for the next three months, after which it will be scrapped.