Telstra will undergo an independent review of its compliance with compensation rules after internal system errors led to delayed compensation payments of more than $11 million owed to over 67,000 customers.
Under industry rules, telcos must meet agreed timeframes around landline connections and repairs or else customers may be entitled to compensation. If a telco exceeds the timeframes it has 14 days to assess if it will accept liability to pay the required compensation.
An Australian Communications and Media Authority (ACMA) investigation found that between July 2017 and June 2021, Telstra failed to accept that it was liable to pay compensation within the 14 day time limit on over 67,000 occasions.
ACMA Chair Nerida O’Loughlin said telcos accepting compensation liability is a key step in customers being treated fairly.
“Telco customers are entitled to compensation to make up for delayed connections or fault repairs of their landline. Telstra has let down its customers by not paying compensation in a timely manner,” Ms O’Loughlin said.
Telstra has now paid affected customers more than $11 million in compensation and entered into a court enforceable undertaking with the ACMA where it has committed to implement an improved payment assessment solution so that any compensation owed to customers is paid on time. Telstra is also required to regularly report to the ACMA on its compliance with the compensation rules for the life of the 2-year undertaking.
The ACMA investigation found Telstra’s conduct failed to comply with obligations under the Telecommunications (Consumer Protection and Service Standards) Act 1999.
This follows recent ACMA breach findings for billing accuracy, maximum available speed and Integrated Public Number Database (IPND) breaches by Telstra – due to problems with legacy IT systems.
“Telstra knows it has had a problem with its internal systems and processes, uncovered through its T22 business strategy. The company has self-reported this and other recent breaches.
“It is critical that Telstra addresses these longstanding issues in building new systems and processes and, where it is obligated to, compensates its customers for historical breaches of telco rules.
“The ACMA will continue to monitor Telstra’s progress on its work to update systems and processes so that future non-compliance and the associated negative outcomes for consumers are a thing of the past,” said Ms O’Loughlin.