Under ACMA rules telcos must verify maximum internet speeds and notify customers when speeds cannot meet those advertised in their plan. In these circumstances customers are entitled to move to a lower speed tier plan at a lower price or exit the contract without cost.

The ACMA has issued Telstra with a Remedial Direction under which it must commission an independent audit of the systems it has in place to notify customers of their maximum attainable speeds.

ACMA Chair Nerida O’Loughlin (pictured) said an investigation found that between September 2018 and October 2020 Telstra failed to suitably notify up to 49,092 affected customers of their under-performing internet speeds and plan options.

“The ACMA is very concerned with this conduct as these customers have been paying for a level of service they were not receiving,” Ms O’Loughlin said.

“Telstra denied these customers the opportunity to downgrade their plan or exit their contract.”

As reported last week, Telstra’s Sanjay Nayak in a post on Telstra Exchange said, “We have become aware that we have failed to meet these commitments and rules for many customers. We’re now in the process of contacting all customers who have been potentially impacted to offer them appropriate remedies.

“As we became aware of these issues, we reported them to the ACCC and the Australian Communications and Media Authority (ACMA) and have developed a comprehensive remediation programme. This programme started in February 2021 and we’ll contact customers over the next few months.”

The ACMA say around $25 million in refunds is expected to be paid in connection with this issue, although that total comprises additional cases not included in the ACMA’s findings. Telstra is reporting regularly to the ACMA on its refunding progress.

The ACMA also said that Telstra also breached rules that do not allow a telco to charge for an NBN service unless ten working days have passed since customers were advised of their options and they have not taken up an available remedy.

Under the Remedial Direction, Telstra must also implement a range of systems, processes and reporting to assure the future compliance with the ACMA rules.

“We will take a very close look at the results of the independent audit to make sure we are satisfied that the action Telstra has taken will adequately address the flaws that led to the problems,” Ms O’Loughlin said.

If Telstra fails to comply with its Remedial Direction it could face penalties of up to $10 million.