TELECOM Digest OnLine - Sorted: Late Fees Charged by Telco Getting Scrutiny

Late Fees Charged by Telco Getting Scrutiny

Mark Russell, Telecom News Wire (
Sat, 28 Apr 2007 14:33:42 -0500

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

"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

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.

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