The consumer watchdog has started proceedings against Telstra after the nation’s largest telco both permitted and profited from a third-party billing service that allegedly billed customers without their knowledge or consent.

“Many Telstra customers paid for content they did not want, did not use, and had difficulty unsubscribing from,” Australian Competition and Competition Commission (ACCC) Chairman Rod Sims said.

After shutting down the service on March 3, Telstra and the ACCC today agreed to jointly submit to the federal court that Telstra pay a penalty relating to its Premium Direct Billing service that over two years led to possibly 100,000 users being billed for unknown purchases.

Mr Sims said Telstra had so far reaped $62 million in revenue from 2.7 million mobiles.

The ACCC says during 2015 and 2016, thousands of Telstra mobile phone customers unwittingly signed up to subscriptions or charges with third parties, without being required to enter payment details or verify their identity, using Telstra’s third-party billing service.

Charges were automatically applied to Telstra customers’ prepaid or postpaid mobile accounts.

“Telstra knew that the Premium Direct Billing service it operated led to large numbers of its customers being billed for purchases made without their knowledge or consent.

Telstra has started refunding customers but “admitted that refunding affected customers has proven to be difficult”, the ACCC said. Source  telstra bill