Vodafone has admitted to making false or misleading representations about its third-party Direct Carrier Billing (DCB) service, following an Australian Competition and Consumer Commission (ACCC) investigation.
The telco will contact and refund impacted consumers after it was discovered the company likely breached the ASIC Act from at least 2015, by charging consumers for content they had not agreed to buy or had purchased unknowingly.
The investigation was carried out by the ACCC under a delegation of the Australian Securities and Investments Commission (ASIC)’s powers.
Vodafone has given a court-enforceable undertaking relating to the billing service, which charged Vodafone customers for ringtones, games and other digital content provided by third parties.
The DCB service was automatically enabled on Vodafone customers’ mobile accounts, and purchases could occur with as little as one or two clicks. The purchases would then be charged on the customers’ next Vodafone bill.
The content was marketed and provided by third parties who paid Vodafone commissions for sales to its customers.
“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 says.
“Other companies should note, money made by misleading consumers will need to be repaid."
Vodafone will contact potentially affected customers and offer refunds where appropriate. It will also review any complaints and deal with those customers in "good faith'.
In response to an increase in complaints about the service during 2014 and 2015, Vodafone began phasing out DCB subscriptions in mid-2015, and cancelled its arrangements with certain third-party providers of digital content.
However, consumers could still be charged for one-off purchases without any identity verification until March 2018.
This enforcement action follows ACCC proceedings against Telstra and Optus in relation to their DCB services.
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