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Tuesday, 21 July 2009 11:27

ACCAN comes out fighting, slams Telstra billing fee

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The newly-formed Australian Communications Consumer Action Network (ACCAN) has made its public debut with new CEO, Allan Asher, slamming Telstra's plan to charge for bill payments other than by direct debit.

Telstra announced today, 21 July, that from 14 September 2009 it would charge a $2.20 administration fee for each bill payment sent by mail or made in person at a Telstra Shop or Australia Post, except for certain exempt customers.

In future the only fee-free payment options will be direct debit by Telstra from a customer's bank account or customer initiated BPAY payment. Business customers will even be charged the fee if they initiate electronic funds transfer to a Telstra account (an option not available to residential customers). Telstra is offering up to $50 cash back on some Telstra Shop purchases for customers who sign up to direct debit by 14 September 2009.

Telstra also intends to increase the existing fees for credit card payments from 0.69 percent to one percent for MasterCard, Visa and American Express and from 1.68 percent to two percent for Diners Club (plus GST). Details at www.telstra.com.au/bpfees and www.telstrabusiness.com.au.

Telstra Consumer executive director Jenny Young's reasons for the charge sound somewhat unconvincing. She basically tried to justify the impost on the basis of the normal costs of doing business. "Every year we spend hundreds of millions of dollars on billing, which includes processing bill payments, paying third-party billing service providers, answering customers' questions about their bills and operating systems to support billing."

ACCAN branded the move "ill-timed and a bad deal for consumers," and Telstra's claim that it needed to impose the charge, in part, to cover the cost of handling customer complaints produced a stern rebuke from Allan Asher, head of the ACCAN (who took up the post of the new organisation last week) .

He said: "It is adding insult to injury that Telstra claims the new fee is aimed in part to recover the costs of dealing with consumer complaints. It would be better for everyone - including Telstra shareholders - if it improved the quality of service in the first place so consumers aren't forced to spend frustrating hours trying to resolve service problems."

Asher also criticised the seven weeks notice of the new charge, saying: "Consumers will not have the opportunity to shop around and get a better deal or to reorganise their bill paying to take advantage of free options."

Phil Herrick, the general manager of regional phone company, Southern Phone, was also quick to criticise Telstra, saying: “How can any company charge you for a service, then charge you to pay your bill?. It is just another regrettable sign of how far Telstra has moved away from our community.

“Southern Phone does not charge people to pay their account, nor do we penalise people paying by credit card. We live in regional Australia and we understand that going into the local Post Office is the easiest way to pay a bill.”
 
He added that Southern Phone had seen a marked increase in people calling to transfer their services following Telstra’s announcement of its new bill payment charges.

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