Telstra Turns $225 Bill Into $2mn Overdraft

Calum Mawson is much like other customers of Telstra, the Australian telco. When he received a bill for AUD225 (USD166) he went online to pay it. But when he received confirmation of the transaction, it said that AUD2,250,623 (USD1.66mn) would be taken from his bank account instead. Mawson contacted Telstra to explain a mistake had been made, and Telstra responded to say payment would not be taken. But the two-million-dollar transaction was executed, leaving Mawson with a huge overdraft and no money. The transaction was reversed a few days later, though Telstra refused to compensate Mawson on the grounds that his error was to blame for the huge payment. Mawson disputed their version of events, insisting he correctly entered the AUD225 amount to be paid. You can read the full story from the

This is not the worst thing a telco has ever done, but it does beg a question about business priorities. How often do Telstra customers go online to settle a million-dollar bill? Does Telstra have to design their retail customer payment portals so it can accept amounts that would only apply to big corporate customers? And why did they tell the customer that payment would not be taken, then take it anyway?

Telcos talk a lot about Big Data, but this is an illustration of how most customer interaction continues to be executed in a manner that is stubbornly unintelligent and devoid of any relevant data. The customer had a pretty average bill of AUD225 but Telstra scheduled a payment that was ten thousand times larger. The user was seemingly not blocked from entering such a large amount, no alarm went off as a result of the huge payment, and no logic was applied to ensure such an unusual transaction received human oversight.

Money flows in both directions, and intelligent telcos implement systems to stop fraudsters drawing large amounts of money from their business. The same logic could be applied both ways. Telstra applied no validation to this customer’s payment, so now they have suffered another little black mark against their reputation. Would it not be easier to use technology to apply a common sense review of all transactions, and hence spare everyone the trouble and cost involved in reversing mistakes later?

Eric Priezkalns
Eric Priezkalns
Eric is a recognized expert on communications risk and assurance. He was Director of Risk Management for Qatar Telecom and has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and others.   Eric was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He was a founding member of Qatar's National Committee for Internet Safety and the first leader of the TM Forum's Enterprise Risk Management team. Eric currently sits on the committee of the Risk & Assurance Group, and is an editorial advisor to Black Swan. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.   Commsrisk is edited by Eric. Look here for more about Eric's history as editor.
  • Tony Poulos

    Crikey Eric, what bank gives a guy with a $225 phone bill a $2.25 million overdraft? I think the bank is the one with the problem here.

    • If my bank gave me an overdraft like that you wouldn’t hear me complaining. Because I’d disappear with the money and nobody would ever hear from me again!