CRM system blamed in Telstra’s $2.5M overcharging bungle

CRM system blamed in Telstra’s $2.5M overcharging bungle

Almost 10,000 customers were impacted by the overcharges, averaging $231 per customer

Credit: 95974440 © Tktktk

A new customer relationship management (CRM) system that was implemented in 2008 has been cited as the cause behind Telstra’s issue in overcharging 10,000 customers almost $2.5 million over a 12-year period. 

The overcharging, averaging $231 per customer, occurred between February 2008 and February 2020 when customers were provided with an interim service (usually a mobile phone) during delays to their connection or repair of landline services.

Telstra reported the issue to the Australian Communications and Media Authority (ACMA), explaining that the billing error resulted from mistakes made when introducing a new customer relationship management system in 2008.

“For Telstra to allow an issue like this to go unnoticed for such a long time and impact so many customers, is simply unacceptable,” ACMA chair Nerida O’Loughlin said.

She added that the errors were a clear breach of the Telecommunications Consumer Protections (TCP) Code.

“The amount charged for an interim service must not exceed what a customer would have been charged under their existing or requested landline service,” she said. 

“Overcharging can potentially lead to financial difficulties for affected customers which is why the ACMA considers accuracy in billing practices to be an important consumer protection.”

O’Loughlin reminded telcos that they must have adequate systems in place to prevent these errors from occurring.

“If telcos are relying on IT systems to meet their regulatory obligations then they must have appropriate testing and assurance processes in place to ensure compliance,” she said.

The ACMA said it acknowledges that Telstra moved reasonably swiftly to fix the problem once identified. It said Telstra also took the appropriate steps to address the issue including refunding affected customers and has committed to removing all ongoing charging for interim services to prevent the problem from occurring again.

Following the investigation, the ACMA has formally directed Telstra to comply with the TCP Code.

Any further non-compliance could lead to significant consequences for Telstra, with penalties of up to $250,000 for failing to comply with the ACMA direction to comply with the TCP Code.

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