Vodafone to refund customers over ‘premium’ content billing

Telco’s Direct Carrier Billing draws ACCC’s ire

Vodafone is the latest telco to fall afoul of the Australian Competition and Consumer Commission (ACCC) over its Direct Carrier Billing (DCB) service.

Optus had to fork out around $12 million in refunds in relation to its DCB service and was slapped with a $10 million fine. Telstra was also hit with a $10 million fine and forced to offer refunds. Vodafone has not been fined but will refund affected customers.

Vodafone offered DCB from at least 1 January 2013 to 1 March last year, the ACCC said.

The service allowed digital content such as games and ringtones, and access to ‘premium’ content services to be purchased from a third party, either on a one-off basis or a subscription basis, with the charge being added to a customer’s monthly mobile bill.

“Through this service, thousands of Vodafone customers ended up being charged for content that they did not want or need, and were completely unaware that they had purchased,” ACCC chair Rod Sims said in a statement.

In a court-enforceable undertaking Vodafone admits that it did not adequately inform its customers that, by default, they were not required to opt-in to the DCB service. As a result, customers could end up purchasing DCB content with “with one or two ‘clicks’ on a web-browser while using their device connected to the Vodafone network” the undertaking states.

“During the relevant period, Vodafone did not require its customers to complete any form of identity verification before having DCB content charges billed to their account,” the document says. “For example, customers were not required to sign in to an account, provide a password, send a text message or provide payment details in order to purchase DCB content.”

In early 2015 the telco experienced a doubling of revenue from DCB but an even more significant increase in complaints from customers. Those complaints included customers inadvertently signing up to a DCB service or being charged for content they never requested. In some cases customers complained they were continuing to be charged despite unsubscribing from a service.

Vodafone in 2014-15 changed how it handled DCB, including phasing out DCB subscriptions and terminating some content providers (and some aggregators, which were the entities with a direct relationship to the telco). Those changes coincided with a substantial decrease in complaints both to the telco directly and to the Telecommunications Industry Ombudsman.

Until March 2018, however, the telco still allowed one-off charges without any identification verification.

Vodafone said it had cooperated with the ACCC.

“We never want to see any customer charged for a service they don’t want,” a Vodafone spokesperson said. “We accept that some of our customers were provided with Direct Carrier Billing services they did not want and we’ve taken steps to prevent that happening again.”

“We apologise to our customers who were affected and will ensure they are notified about our refund program,” the spokesperson said. “We will start contacting affected customers in the next few months and encourage them to contact Vodafone if they have questions or concerns.”

Vodafone has agreed to automatically refund customers who lodged a complaint in relation to DCB. Other customers who didn’t complain but purchased content including Gamifive, Browser Games, Jamster, Play Planet, iGirls, Waala Mobile and iFortune will be contacted and given the option of applying for a refund.

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Tags VodafoneTelecommunicationsAustralian Competition and Consumer Commission (ACCC)Vodafone Hutchison Australia (VHA)

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Rohan Pearce

Rohan Pearce

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