Late Fees Charged by Telco Getting Scrutiny

by Mark Russell

The telecommunications industry watchdog is seeking powers to investigate escalating late-payment fees charged by phone companies.

Customers can be hit with extra charges of up to $30 per bill.

Telstra charges about $50 million each year in late fees and Optus is believed to charge a similar amount.

The Telecommunications Industry Ombudsman is restricted to probing complaints about the provision of telephone or internet services.

It has no power to investigate charges, but a spokesman said this could change soon.

He said the council that oversaw the ombudsman was seeking to expand its jurisdiction to include complaints about the late fees.

The council, which is made up of five Telecommunications Industry Ombudsman member representatives, five consumer representatives and an independent chairman, received 87,593 complaints in 2005-06, an 11 per cent jump on the previous year.

The number of complaints is expected to rise significantly if the ombudsman turns its attention to the late-fees issue.

One angry Telstra customer posted a complaint on the website last week after he was charged $15 for late payment of a bill and queried his billings with a Telstra representative.

"She told me that it was their policy and they stick to that. Needless to say I'm going through the process of changing over," he wrote.

Another customer received a bill, dated April 2, on April 16 and was shocked to find the due date was April 17.

Telstra spokesman Peter Taylor said people were normally given two weeks to pay their bills so it was highly unusual for any customer to find they had only one day to pay. He said the company was happy to investigate complaints.

Telstra customers who fail to pay a bill by the due date are charged between $5 and $15, depending on the amount owing.

A further fee of $10 is charged for bills paid from bank accounts that don't have sufficient funds and a $15 dishonoured cheque fee can also be levied.

Telstra doesn't charge a fee if the amount owing after the due date is less than $65.

The telco introduced a $5 late fee for overdue payments in 2000, two years after Optus hit customers with a similar charge, and increased the fees in 2004.

When questioned by a Senate estimates committee, Telstra said one in three of its customers paid their bills after the due date.

It says overdue payments cost the company more than $75 million a year.

Reply to
Mark Russell, Telecom News Wir
Loading thread data ... Forums website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.