Communications Giant Telstra Exploiting It Position
(Year 2000)

  1. May — Telstra Puts $5 Late Fee On Bills
  2. October — And Gains Millions

Telstra Puts $5 Late Fee On Bills
The Weekend-Bulletin, May 6-7, 2000

Low income earners would be hit hard by Telstra's introduction of a $5 fine for late payment of phone bills, a consumer group said yesterday.

The penalty, which came without warning, will apply to people with bills of more than $50 that are two weeks overdue.

But Helen Campbell, of the Consumers Telecommunications Network which represents residential users, said the fine would hit low-income groups just as hard, despite the $50 cut-off.

"What does it matter what the size of your bill is?" said Ms Campbell. "Low-income earners aren't necessarily people with low phone bills."

Ms Campbell said many low-income earners were from non-English speaking backgrounds who might rack up huge bills with calls to family overseas.

Other low-income earners were also heavy phone users in their search for employment, she said.

The new fine brings Telstra roughly into line with its main rival Optus which charges $5 plus interest for payments more than 21 days overdue.

A Telstra spokeswoman said about 50 per cent of phone bills were paid late, costing the company about $180 million a year.

"The whole idea is to give customers an incentive to pay their bills on time," said spokeswoman Anne-Marie Bennett.

Ms Campbell said the fine had not been mentioned when the CTN negotiated a voluntary Code Of Practice with Telstra.

"It makes a mockery of the whole process. We've spent months sitting around the table with them," she said.

Ms Campbell said the late fine was a misnomer because rent for the phone and some services was paid for in advance by the consumer.

Telstra's new $5 fine was an extraordinary double standard, said Australian Democrats communications spokeswoman Lyn Allison.

"Telstra is rarely penalised when it is late for house calls or when it makes customers wait up to 30 to 40 minutes on hold," said Senator Allison's spokesman.

Telstra Rakes in $15m Late Fees
By Karen Collier The Courier-Mail, Wednesday October 18th, 2000

MILLIONS of Telstra customers have been fined for late payment of phone bills.

Customers have been charged at least $15 million since fees were introduced five months ago.

An estimated three million accounts have been hit with late fees, sparking consumer group anger.

Consumers Telecommunications Network executive officer Helen Campbell accused Telstra of punishing those who could least afford it.

Ms Campbell said the $5 late fee was too harsh and inflexible.

"It should be a two-way street. Telstra is very good at excusing itself for not fixing faults on time," Ms Campbell said.

But Telstra defended the fine as fair and modest.

Spokeswoman Anne-Marie Bennett said customers who struggled to pay bills were offered help such as early warnings, instalment payments and combined accounts.

The comments came as another telephone company revealed late fee plans. Vodafones 1.5 million mobile phone customers face $3.30 fines for repeat late payments. The fee, to be officially announced soon, covered the cost of giving messages to people who constantly and deliberately paid late, spokeswoman Germaine Graham said.

Customers would get three warnings before being fined.

Telstra introduced its $5 late fee for local, long-distance and mobile phone bills in May. At the time it said about 50% of bills were paid late, costing the company about $180 million a year.

The penalty applies to people with monthly or quarterly bills of more than $50 that are two weeks overdue. The fee was described as an incentive for fast payment. But latest figures show about 40% of bills are still being paid late.

Ms Bennett denied the fine was a profit-making tool.

"Recovering late payments cost Telstra an average $36 a bill," she said. "The less money we have (to spend) to chase bills, the more money we have to put into customer service," Ms Bennett said.

Other telecommunications firms contacted refused to divulge full details on fined Customers.

Cable & Wireless Optus, which has charged a minimum $5 late fee for about a year, said 95% of customers paid on time.

Customer service general manager Mark Davidson said people proving genuine financial hardship escaped the fee.

Disconnections were a last resort, he said.

OneTel spokeswoman Tracy Gutting said customers could use direct debit to avoid $6 late fees on monthly accounts. "We strongly encourage people to use the electronic option," Ms Cutting said.

But Financial and Consumer Rights Council policy coordinator Sharon Barker said locking customers into direct debit was a disturbing trend. Ms Barker said some customers risked a double whammy of bank and late phone bill fees if they were overdrawn on an account.

Many direct debit customers also waived their right to bill statements and receipts, making withdrawal mistakes harder to detect.