Pre-Paid account credit theft by Telstra

I just spent a few hours writing then digging around various government and media websites to send this letter off about how our telcos are ripping us off.

By now, I'm tired of it, but want to publish the letter to this blog, so here it is, in full, not in the severely edited-down version I had to cut to to fit into the various authorities' complaints pages.

I think I'm correct in thinking that this is in fact a major scam by the telcos, who may be skimming millions of dollars off Pre-Paid customers, EACH MONTH!

So, have a read, and think about it yourselves.

I have no doubt that there exists in this, a good case against the Telstra corporation, and probably against all other telcos who do the same thing, for a CLASS ACTION.


Pre-Paid account credit theft by Telstra

For over three years I have owned a Telstra wireless broadband internet device (service number zzzZZZitt), and pay-by-the-month via their “Pre-Paid” payment arrangement.

This has served me well, as I am Nomadic, and, do not have any one permanent fixed address, for such as telephone bills to go to.

Each month, around nine days before the 30 day period of the service expires, Telstra send my service a text message, reminding me that the monthly period runs out, as said, in nine days, and that I must “recharge” the account before that time expires.

This is fine.

To pay over the internet, or were I to go in person to a branch of the bank I am with, to make a bank transfer over the counter, there is a time delay of around three days, between lodging the payment, and the telco receiving and registering the payment, thus adding that payment to my account's credit.

An acceptable situation.

However, there is no guarantee that the payment will reach the telco in exactly three days.

Sometimes, it can take upto five days.

If payment is late to Telstra, in that it arrives after the end of the month's period, my account is stopped, shut, and the credit not-spent from the previous month is subsumed by the telco, to my loss. Often, that credit amounts to between $50.00 and $100.00.

Therefore, to ensure I do not lose that credit, I am forced to pay a “safe” number of days before the previous month's credit expires.

This means that, as said above, as there are, (and I accept there can be), no guarantees that the transaction will pass through the electronic, internet banking system in any constant and precise number of hours or days, this means that I am wise to pay more than three days prior to the expiry date.

This also, I can accept, as part of the current online banking structure, replete as it still is, with failings and gaps.

However, what amounts to a loss for myself, and a boon, small but a boon nevertheless, to the telco, is that if I pay ahead of the due date, and ahead of the usual three day period for the transaction to travel the wires and be received by the telco, to ensure it arrives at the telco before the previous period expires, thus ensuring I do not lose the built-up credit, in paying any “safe” number of days prior to the due date, as often, the payment arrives early to Telstra.

This again, is quite acceptable.

But, and here is the crux of the problem, or the crux of the loss to my account, is that the new month's credit, begins when the payment is received by Telstra.

So, when they receive the renewal payment one or two days before the previous monthly period was due to expire, they start the new month's credit from the date they receive the new pre-payment.

So, every time, Telstra steals one, two or more days of my credit and payment from the last month.

This happens every month, as I have detailed above, so-as to ensure the next month's Pre-Paid credit payment arrives before the last one's expiry, I pay a “safe” number of days before the time, and every month, they deduct one or more days off the last month's credit.

And, if payment is late, and the Pre-Paid account is shut, they scam all the accrued credit from the previous month!

I have no doubt that this little flaw in the payment method is let to pass by Telstra, and no doubt other Pre-Paid telco systems, because it is profitable for them.

I believe this is cunning and deliberate, as I have used this same telco since well before they became, in name “Telstra”, and am quite familiar with their good and not so good services and practices.

If this were happening to just one customer, it would hardly amount to any large boon to the telco.

However, as there are many thousands of Telstra customers who pay the same “Pre-Paid” way, and I assume, must ensure that “safe” gap between lodging the transaction, and the telco receiving the payment, the sum-total of “easy-money” for the telco, by their “skimming” a day or more credit from each account, surely would amount to some hundreds-of-thousands of dollars, and possibly to some millions - each month

Plus, they win-back the unused credit if customers are late renewing their Pre-Paid account.

Not, therefore, a small or incidental practice of theft.

In order to stop this practice, of “skimming” one or more days of credit (PLUS any residual credit unused) off a Pre-Paid customer's credit account, surely it would be easy and proper to make a rule that telcos allow the customer to set a date for the credit to expire/renew, from month to month.

Customers should also be given a two-day late period, if they do not pay on time.

These rules should perhaps be made available for customers who've proven credible “Pre-Paid” payment regularity over a “six-month” period. But there should be no reason why it could not be part of the agreement from the beginning.

Please correct this little yet unconscionable flaw in the system.

Copies of this letter are being sent to Telstra, to a number of mainstream and alternative media organisations, corporations and newspapers as well as to the Telecommunication Industry Ombudsman (TIO).


Max N Cook

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