Optus and Telstra are complicit in a predatory multimillion-dollar billing scam. Thousands, if not hundreds of thousands of broadband customers around Australia are unwittingly “opting-in” to services by clicking on ads and paying $40 a month for content they never intended to buy. Netflix, in comparison, which has substantial original content, charges just $10 a month for a standard subscription.
When contacted for this story, Optus declined to respond to specific questions about its relationship with shady third-party billing service MIA Sphere Live, how it made its profits and the size of these profits. The telco did however say that it had raised the issue with MIA Sphere Live, suspended its “YouLaugh2” service and was investigating the matter.
This is the account of one computer-savvy Optus customer, Dean van Dijk:
I received the following SMS on the March 16, 2017, around 10.30 pm:
“Welcome to Youlaugh subscription costs $9.99/wk for unlimited access Opt-out send STOP to 19789186 HELP: 1300115921”.
Attached was a link to this website — http://aus.youlaugh.online/ — which appears to be based in the Netherlands.
I did not click on the link and immediately thought the SMS was a scam. Each week I received another SMS:
“Your subscription to YouLaugh costs $9.99/wk charged to your mobile account. Opt-out send STOP to 19789186? HELP 1300115921”.
I presumed these were all part of the scam because I had never activated a subscription on March 16; and you should never click on a scam email or SMS.
On April 18, I looked at my online Optus account to find a $9.08 charge under the vague heading of Content Services. After speaking with Optus billing it was clarified as Youlaugh2, from supplier MIA Sphere Live. The full description only appears on my PDF bill, on page 15 of 21.
Looking at my previous PDF bill I discovered a further $27.24 charged for the previous month. This was taken from my bank account as part of Optus’ direct debit.
Optus suspended all similar services on my account last week, which I would like explained. I was not notified of the suspension until I called today asking questions. Optus gave me a help desk number for Youlaugh2 and Mia Sphere Live (1300 724 406) and told I could get more information from them.
The woman on the Mia Sphere Live help desk was very helpful and compliant. She told me her job was to help customers cancel the service and provide refunds. It’s a bad sign when your help-line is dedicated to canceling and refunding customers.
I wanted to know more about the Content Service that cost $40 per month and it was described as a viral video streaming service, advertised on Facebook, via a pop-up. Why would any one pay $40 per month for viral videos? The answer, because Youlaugh2 or MIA Sphere Live does not have ads. This is just like YouTube Red but a much worse service.
Apparently you need a Telstra or Optus mobile phone to be billed for this service – luckily Vodafone users are not eligible.
Thank you Telstra and Optus for enabling a content service that is four times the price of YouTube Red with only a small fraction of the content.
MIA Sphere Live and YouLaugh2 are third party content providers. Optus does not own MIA Sphere Live or YouLaugh2.
Optus requires third party content providers to present customers with appropriate acknowledgement of charges and a double opt-in process, as well as the ability to cancel on a weekly basis. We regularly review these providers to ensure they are complying with this requirement.
Optus is aware of recent advertisements for YouLaugh2 that circumvented the required opt-in procedures. This was raised with MIA Sphere Live and as a result, YouLaugh2 services are currently suspended to all Optus customers. We are currently investigating how these advertisements were able to occur.
If customers believe they have inadvertently subscribed to third party content, they can generally unsubscribe by replying with the word “STOP”, or call our Customer Care Team on 133 937 for assistance.
The chat-lines are teeming with indignant victims of the third party billion rort.
A story in The West Australian last year, which relied on an anonymous Telstra source, said thousands of Telstra customers had been caught up in third party billing scams. Telstra made “millions” of dollars in revenue.
Given the dominance of Telstra and Optus in the broadband market, the profits from unsolicited third-party billing may run into the tens of millions of dollars. It is likely, as the telcos are the ones who access the cash directly from their customers’ bank accounts – without whose service the scam would not be possible – that they enjoy very favourable terms with the third parties.
It is not known however what commercial arrangements the telcos have with the third-party billers, nor is it known by customers what has been clicked on to “accept” the service.
If the myriad testimonies by victims in the chat-rooms are any guide, the telcos are quick to repay the debits once the customer has complained. This suggests that they are willing to wear a degree of customer pain in order to enjoy the profits but also unwilling to shut the scams down.
It also suggests that competition regulator, Australian Competition and Consumer Commission, ought to be investigating.
Feedback from any happy and knowing customers of YouLaugh2 is welcome.
- Dean van Dijk provides web-hosting services and design for this website.
Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences.