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The encyclopedia · Advertising & PR · Marketing decision · 2015

Telus let third parties bill customers for horoscope texts — $7.34M in rebates

Dec 2015: Telus rebated $7.34M to customers after the Bureau found misleading ads let third parties charge Telus and Koodo users for trivia and horoscope texts.

Telus Communications Inc. · 2015-12

What happened

Third-party premium text services — trivia, daily horoscopes, ringtones — billed Telus and Koodo wireless customers after ads appeared in pop-ups, apps and social media. The Bureau concluded that Telus made, or permitted to be made, false or misleading representations in those ads: the charges landed on phone bills without a disclosure adequate to what the customer was agreeing to. The carrier was the billing rails; the ads rode on them, and the carrier was responsible for what they said.

The consent agreement of 30 December 2015 required rebates of up to $7.34 million to current and former Telus and Koodo customers who were charged for the services from 1 January 2011 onward. Telus was the second of Canada's major carriers to settle the premium-text sweep — Rogers had agreed to $5.42 million in refunds earlier that year.

The principle is the one the Bureau applied across the sweep: a carrier that permits misleading advertising on its own billing relationship is answerable for it, even when a third party wrote the ad and took the money. Owning the bill means owning the claims made against it.

Why it happened

  • The ads lived in pop-ups and apps; the charges landed on the phone bill the carrier sent.
  • Consent to a recurring charge was not adequately disclosed at the moment the customer clicked.
  • Telus permitted the representations on its billing rails — permission made them the carrier's responsibility.
What it cost$7.34M in customer rebatescostly

The lesson

A platform that lets third parties bill through it owns the representations those third parties make: permitting misleading ads on your billing relationship makes you answerable for them.

Aftermath

Telus issued rebates to affected customers from January 2011 onward. The premium-text sweep closed with Rogers, Bell and Telus all settled — and disclosure standards tightened for carrier-billed subscriptions.

Sources

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