Telstra compensation process puts onus on customers, consumer body says

For Uber driver Turab Ali, last Wednesday’s Telstra outage was more than a disruption — it wiped out up to $400 in expected earnings.

Mr Ali began driving full-time about a month ago after graduating from university and struggling to find work in IT.

He said he worked 12-hour shifts, six days a week and that it was a significant amount of money to lose.

“$400 a week goes a long way,” Mr Ali said.

He said he was taking a passenger to the airport at about 5am on Wednesday when his mobile service began cutting out and the Uber app registered him as offline.

Mr Ali said he lost four trips he had booked, including one worth about $100, during what would usually be one of the busiest parts of his shift.

Both of his mobile services were affected. One was with Telstra and the other with Telstra-owned Belong.

Mr Ali has since moved his second service to Optus and says he will seek compensation.

“Telstra is one of the largest companies in Australia,” he said.

“I don’t see why they would be any problem in repaying their customers at the end of the day.”

What are customers legally entitled to?

Under Australian Consumer Law services that cost less than $100,000 are generally covered by consumer guarantees, including a requirement that they be provided with due care and skill.

The protections can apply to individuals and small businesses and cannot be excluded by contract.

University of Melbourne law professor Jeannie Paterson said the key question was whether Telstra failed to take reasonable steps against a foreseeable risk.

“If Telstra was negligent, Telstra is liable for compensation. There’s no doubt about that,” she said.

“What is uncertain is, one, whether the telco was indeed negligent and, two, the extent of that compensation.”

If a breach is established, customers may be able to recover the cost of the service during the period of unavailability, as well as reasonably foreseeable losses caused by the outage, including lost business income.

The outage was blamed on a software bug that caused the network’s clocks to go out of sync.

ABC News previously reported that the telco had been warned by academics and government agencies it was vulnerable to the timekeeping issue that caused last week’s national outage.

Investigations will examine the software fault and what could be done to improve the reliability and resilience of the company’s timing system.

How Telstra’s claims process works

Compensation is not guaranteed but affected customers can still make a claim and Telstra has published online complaint forms for residential and small business customers.

Businesses claiming direct financial losses must explain the impact, estimate the amount sought and provide evidence such as booking records, invoices, EFTPOS reports, accounting records or comparable sales.

“In terms of the process, it’s quite straight forward,” a Telstra spokesperson said.

“We ask customers and small businesses to fill out a simple form so we can capture the basic details and process their request.”

Last week chief financial officer Michael Ackland said complaints would be handled on a “case by case basis”.

Attwood Marshall Lawyers legal practice director Jeff Garrett is exploring a potential class action against Telstra and says affected customers will need to prove they suffered direct financial loss.

“The key will be keeping the proof of what’s happened or proving that you’ve suffered those losses,” he said.

Customers dissatisfied with Telstra’s response can ask for their complaint to be escalated within the company before taking it to the Telecommunications Industry Ombudsman (TIO).

Pensioner unsure how to navigate claim

Sunshine Coast cab driver Colin Hall said the outage cost him $300, more than half his usual daily earnings.

The 73-year-old said he relied on driving to supplement his pension and meet basic expenses.

“Every dollar I lose is pretty big because I only do this job because the age pension doesn’t pay enough for me to live,” he said.

“If I didn’t do this job, I couldn’t buy clothes. If I didn’t do this job, I couldn’t pay for fuel. The list goes on.”

But Mr Hall said he was unsure how to navigate Telstra’s online forms and provide the evidence required to make a claim.

“You feel like you don’t count. You are small, you are insignificant,” he said.

Calls for automatic compensation

Australian Communications Consumer Action Network (ACCAN) chief executive Carol Bennett said Telstra’s process put too much responsibility on affected customers.

“I think it’s wrong to put the burden of proof back on consumers and we’re going down that route again,” she said.

“This needs to be proactive. It needs to be real and it needs to be automatic.”

Ms Bennett is also calling on Telstra to follow the TIO’s Good Industry Practice Guide on Compensation “as a minimum” to help “restore confidence and trust”. 

The guide was developed in response to recommendation 13 of the Bean Review following the 2023 Optus outage and outlines how telcos should handle compensation after major outages, but it is not a legally binding document.

A spokesperson for Communications Minister Anika Wells said it gives clear direction to telcos. 

“We expect Telstra to comply with all elements of this important work and deliver fair, expedited and efficient compensation to those who suffered losses.”

Ombudsman Cynthia Gebert said that consumers should not have to do all of the heavy lifting after a major outage.

“Telcos need to proactively identify impacts, communicate clearly — and early — about available support, and consider remedies that are fair and appropriate for someone’s situation,” she said.

“Consumers rightfully expect practical support and a simple process for raising concerns or requesting compensation if appropriate.”

Business group warns against ‘token’ offers

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said Telstra needed to assess claims fairly.

“There’s no doubt that there are going to be quite a number of small business customers in particular who’ve been out of pocket as a result of the outage last week,” he told The Business on Monday.

Mr McKellar said claims should be dealt with quickly because businesses still had wages, energy bills and other expenses to meet.

“I think, within the next billing cycle … certainly as soon as they can quantify claims, then they really should be looking at how they offer some form of compensation,” he said.

Communications criticised

Telstra customer Allan Paine said the disruption of the outage was worsened by a lack of information from Telstra as he tried to manage staff at a remote industrial site from Hobart.

He said Telstra’s outage page repeatedly returned errors on Wednesday morning, leaving him to search news sites and online forums for information.

“The first I really saw about it was when Telstra released a media statement on the news,” he said.

Mr Ali also said he received no direct communication from Telstra last Wednesday morning.

After returning home and connecting to Wi-Fi, he searched Facebook groups, where other drivers were reporting the outage.

Mr Paine said the lack of updates was more frustrating than the outage itself, because even a scheduled time for the next update would have allowed him to stop searching for answers.

Telstra chief executive Vicki Brady emailed customers on Monday to apologise and promised a full investigation.

More than 600 Triple Zero (000) calls failed to connect during the outage.

Telstra executives will appear before a Senate inquiry on Friday.

The ACMA and Telstra are conducting separate investigations.

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