Telcos face suit over late-payment charges

September 3, 2014
Adam Turner for SMH

Click here for original article

The class action, brought by ACA Lawyers, alleges late payment fees on telephone and internet bills are an ‘‘unlawful penalty’’ that far outweighs the actual costs to the telcos.

Telstra, Optus and Vodafone face multimillion-dollar class action lawsuits over claims they charged customers excessive late payment fees.

Initially targeting Telstra, the class action, brought by ACA Lawyers, alleges late-payment fees on telephone and internet bills are an “unlawful penalty” that far outweighs the actual costs to the telcos.

The class action is backed by one of Britain’s leading litigation backers, Harbour Litigation Funding.

Telstra reportedly collected $272 million in late fees and other miscellaneous charges in the 2013-14 financial year, according to ACA, which contributed to an after-tax profit of $4.28 billion.

The lawsuit against Telstra follows from similar successful class actions against Australian banks over what were deemed to be excessive customer fees, with the Federal Court finding that ANZ Bank’s late fees exceeded the true costs of dealing with late payments by up to 7000 per cent.

In a media release, ACA Lawyers principal Steven Lewis says hundreds of thousands of Telstra customers have paid late fees since 2000 “in the mistaken belief Telstra was entitled to charge the fee”.

“A recent court decision in relation to credit card fees found that late-payment fees charged by banks are unlawful and that clients are entitled to get most of their money back,” he says. “We will argue this is the same for the late payment fees charged by Telstra, Optus and Vodafone. Telstra announced a massive profit, which is built in part on revenue from late-payment fees often collected from families who can least afford it.”

The class actions are open to any Telstra, Optus and Vodafone customer who has paid a late fee within the past six years, although this period may be extended – as it was against the ANZ Bank – pending an appeal currently before the Federal Court.

Telstra’s accounts for the four years from July 2009 indicate it may have collected a further half a billion dollars in late and miscellaneous fees over those years, Lewis says.