Vodafone must also refund users stung by third-party billing

Vodafone to refund customers over misleading third party charges

Vodafone to compensate customers over 'direct carrier billing' charges

Vodafone will be forced to track down and refund customers who unwittingly purchased content such as ringtones and games using the telcos direct-carrier-billing services.

The carrier is the third of Australia's three mobile operators to commit to refunds following an investigation by the Australian Competition and Consumer Commission (ACCC).

Direct billing services (DCB) allow third parties to sell digital content like games and ringtones and charge customers directly to their phone bill, often without their knowledge or consent.

In Vodafone's case, DCBs were automatically enabled on customer accounts, meaning purchases could be made with just one or two unwitting clicks.

Vodafone received a commission for the sales, which would appear on the customers' next bill.

Vodafone admitted that it likely breached the ASIC Act from at least 2015, by charging consumers for content they had not agreed to buy or had purchased unknowingly.

A Vodafone spokeswoman said in a statement that the telco apologised to customers who were affected and would be contacting them in the next few months to ensure they knew about the refund program.

The ACCC has previously taken action against Telstra and Optus for their DCB services.

A number of customers continued to be charged for DCB services even after unsubscribing from the content, the investigation found.

"The purchases would then be charged on the customers" next Vodafone bill'.

However, consumers could still be charged for one-off purchases without any identity verification until March 2018.

As part an undertaking with the ACCC announced on Tuesday, Vodafone will offer refunds for customers hit with charges from 2013 to March 2018 from the most-complained-about digital content providers, including Gamifive and iFortune. Those complaints included customers inadvertently signing up to a DCB service or being charged for content they never requested.

Vodafone in 2014-15 changed how it handled DCB, including phasing out DCB subscriptions and terminating some content providers (and some aggregators, which were the entities with a direct relationship to the telco).

Vodafone has been contacted for comment.

Vodafone said it had cooperated with the ACCC. ASIC has delegated to the ACCC powers and functions under the ASIC Act in relation to financial products and services provided in connection with telecommunications services.

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