Telstra was fined $10 million by the Federal Court on Thursday for signing mobile customers up to online subscriptions they didn't know of or consent to sign up for.
It was estimated that more than 100,000 customers may have been caught up by the "premium direct billing (PDB)" service Telstra operated.
The service was automatically switched on for Telstra customers in 2015 and 2016, and meant that customers were signing up for subscription services to games or other services associated with TV shows like Dancing With The Stars, Million Dollar Minute, and My Kitchen Rules without agreeing for that fee to then be passed onto them on their mobile phone bills.
The customers wouldn't have to even verify it was them by signing into an account login before the charges were added to a customer's bill.
"Telstra was aware that children were at risk of inadvertently subscribing on a family member’s phone," Australian Competition and Consumer Commission (ACCC) chair Rod Sims said in a statement.
Some customers, who had signed up for a new account and were given a recycled phone number even found they were being charged for premium billing services signed up for by the previous owner of that mobile number.
Telstra ceased offering PDB services in March this year, but was taken to court by the ACCC for misleading customers about the service.
In a decision handed down by the Federal Court on Thursday, Telstra was fined $10 million for breaching the law by misleading customers.
But the amount Telstra has paid in fines is a small portion of the amount of money Telstra made from PDB. The court heard that until October 2017, Telstra had generated a net revenue of $61.7 million via PDB content charges.
So far, Telstra has only repaid $5 million back to customers.
Those who complained to Telstra about it in the past or took their complaint to the Telecommunications Industry Ombudsman will also get a refund, but Telstra otherwise is not being proactive in seeking out everyone charged under the scheme.
Telstra has said it will offer to refund those who are deemed to have signed up for the service without their knowledge or consent.
Sims said the ACCC would be investigating similar services offered by other mobile companies and examining whether they're also in breach of the law.