Determinations

TDR Case Note T004305 (2010)

Issue

Billings - undercharging mobile services, back billing.

Background

The customer (a small business) entered into a contract with the Scheme Member T Provider (Provider) in November 2009 for the provision of two mobile telephone connections and handsets.

After a routine audit in August 2010, the provider realised that it had undercharged the customer by the amount of $4,443.09 for some of the services provided. The provider apologised to the customer for the error, but sought payment of the backdated charges. The provider offered a goodwill credit of $300 in recognition of its error, plus a credit of $1,046.65 which it acknowledged it ought to have provided as a promotional discount. This resulted in an outstanding debt of $3,096.44.

The customer accepted that it owed the amount of $3,096.44, but contended that the incorrect charge was due entirely to the provider’s error. The customer felt that, in the circumstances, the provider should be flexible as regards recovery of the amount owed, and offered to pay instalments over a 6-month period. The provider required payment within 3 months from the November billing cycle. The customer lodged a complaint with TDR on September 2010 in relation to the payment plan.

Adjudicator’s decision

The adjudicator found that the essential issue related to the outstanding mobile charges resulting from the provider’s billing error. The quantum of the debt was accepted by both parties, and the question therefore became whether the provider could seek repayment of that debt over 3 months as opposed to the 6 months proposed by the customer. The adjudicator found that even though the debt arose as a consequence of the provider’s billing error, the customer was liable to pay the outstanding debt not only under the terms of the contract, but also under the Customer Complaints Code (the Code) and the common law. This was because the provider had duly provided the services it agreed to provide under the contract, and was entitled in law to be paid for those services.

Regarding the payment plan, the adjudicator found that TDR had no ability to adjudicate upon that aspect as it had not been formally raised as part of the customer’s original complaint. However, the adjudicator noted that clause 12.4 of the Code provided that “if undercharging is found to have occurred, the Scheme Member will provide a reasonable period for the customer to repay the amount owned”. The adjudicator noted that the TDR would be able to consider the payment plan if a new complaint were to be made about that aspect. While it was not a part of the formal adjudication, the adjudicator recommended that a fair and pragmatic solution would be for the customer to pay the outstanding debt of $3,096.44 over a period of 4.5 months starting from the November invoice.

Around the time the adjudicator’s draft determination was issued, the provider sent a letter to the customer’s overseas parent company indicating that payment of the outstanding balance was required otherwise services would be suspended. The parent company went ahead and paid the full amount. The customer submitted that this unusual situation demonstrated the provider’s disrespect for the TDR and the whole judicial process. The provider apologised for this action, but the adjudicator found that, as a consequence, the matter had been effectively finalised as the outstanding debt had been paid in full.

Final outcome

The adjudicator concluded that the quantum of the outstanding debt was agreed by the parties and the customer was liable to pay the outstanding debt of $3,096.44, which had been paid. There were therefore no remedies awarded.