ACCC has revealed that Vodafone has made false or misleading representations about its third-party Direct Carrier Billing (DCB) service and will refund impacted consumers in Australia, following an ACCC investigation.
Vodafone Australia admitted that it breached the ASIC Act from at least 2015, by charging its mobile phone consumers for content they had not agreed to buy or had purchased unknowingly.

Vodafone charged customers for ringtones, games and other digital content provided by third parties.

The DCB service was automatically enabled on Vodafone customers’ mobile accounts, and purchases could occur with as little as one or two clicks. The purchases would be charged on the customers’ next Vodafone bill.

The content was marketed and provided by third parties who paid Vodafone commissions for sales to its customers.

“Through this service, thousands of Vodafone customers ended up being charged for content that they did not want or need, and were completely unaware that they had purchased,” said ACCC Chair Rod Sims.

Vodafone will contact affected customers and offer refunds. The press information from ACCC did not reveal the number of the customers who were impacted by the false billing issue.

Vodafone Australia started phasing out DCB subscriptions in mid-2015, and cancelled its arrangements with certain third party providers of digital content following significant number of complaints about the service during 2014 and 2015.

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

This enforcement action follows ACCC proceedings against Telstra and Optus in relation to their DCB services. Telstra and Optus are the other leading telecom operators in Australia.

Vodafone’s DCB service — from 1 January 2013 to 1 March 2018 — allowed customers to purchase digital content from third party developers such as games, ringtones and apps (but did not include content acquired from the usual app marketplaces like Google Play or the App Store), ACCC said.

Charges were automatically applied to Vodafone customers’ pre-paid and post-paid mobile accounts.

Vodafone’s current DCB service is available for a limited amount of content and requires express customer agreement. This service had not been the subject of complaints to the ACCC.