Vodafone has become the latest telco to offer refunds for their so-called ‘direct carrier billing’ service after customers were unknowingly charged for third-party apps and games over a five-year period.
The telco admitted misleading customers about their DCB service from at least 1 January 2013 to 1 March 2018 after the service was automatically enabled on their mobile accounts.
According to the Australian Competition and Consumer Commission (ACCC), which investigated Vodafone, purchases could occur with as little as one or two clicks, which would then be charged on the customers’ next mobile bill.
The content was marketed and provided by third parties who paid Vodafone commissions for sales to its customers.
Most “problematic” among these third-parties were Gamifive, Browser Games, Jamster, Play Planet, iGirls, Waala Mobile and iFortune, the watchdog said. A number of customers continued to be charged for DCB services even after unsubscribing from the content, the investigation found.
The ACCC did not reveal how many customers who were affected by the DCB charges, but has agreed to contact affected customers and offer refunds where appropriate. It will also review any complaints and deal with those customers in good faith, the ACCC said.
“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. “Other companies should note, money made by misleading consumers will need to be repaid.”
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, the watchdog added.
However, consumers could still be charged for one-off purchases without any identity verification until March 2018.
Both Telstra and Optus have also been the subjects of ACCC investigations into DCB services. Last year, Telstra was found to have made $61 million from the service and was fined $10 million.
Seven months later, Optus refunded $12 million to 240,000 customers over the same charges.