How Telstra scammed me out of $240 by lying about free accessories and using an ARO.

On the 20th of October 2016 at 8:30pm, I walked into the Telstra Store on Level 2 at Fountain Gate, ready to buy a new Pixel XL on a brand new plan. The sales assistant was friendly, and walked me through the setup.

During that time, I enquired about the giant billboard outside of Westfield Fountain Gate, which stated that you could receive $200 worth of free accessories for joining up with Telstra on a new plan for 24 months.

The sales lady gladly said they would honor the offer, and offered me a portable speaker, generously referred to as a soundbar. (Which retails online for $99.) Not exactly $200 worth of free accessories, but I was happy, it was free.

She then generated the contract, which showed a $10 per month for 24 months ARO (Accessory Repayment Option). She scribbled it out and said I would not be charged the ARO. Fair enough, I said, unbeknownst to me that this was a common scam played by some unscrupulous Telstra licensees.

Telstra Store Fountain Gate Level 2’s outright lies

Later that month, I received my first bill. Which contained a $10 per month charge for the supposably “free” accessories.

Telstra Bill with Accessory Repayment Option Added

‘Surely that was an error’, I thought to myself. I called Telstra and I was proven completely wrong. I was immediately met with  “There’s nothing to indicate that the accessories were free” and “We have no record of that promotion”.

Alternative shot of the Telstra Scam Billboard, for Telstra Store Fountain Gate Lvl 2
My record of that promotion, pictured.

I made several calls, each time being told that the charge was accurate and that I should have read my contract.

The Australian Consumer Law provides consumers with the right to truthful and accurate representations when buying a product or service. This means that businesses must not mislead you with statements that are incorrect or likely to give you the wrong impression. This rule applies to information that a business provides you in any medium, including when talking to a sales representative, on packaging, in online shopping forums or social media.
— ACCC Response to Complaint Raised

With that in mind, it was not my fault for not reading the contract. Businesses aren’t allowed to do one thing and say another.

I continued to call Telstra, and they told me to call the store at Telstra Store Level 2 Fountain Gate. I called the store and they said they would call me back, they failed to. I called Telstra again and was referred back to the store.

Scamming is common at a number of Telstra licensees unfortunately.

During this run around,  I found stories of other people being deceptively entered into “Accessory Repayment Options” while being told it was free. I learned that this was a common scam pulled by some Telstra Licensees.

The store gave me a spare lead and a phone charger, worth maybe $50 tops. When I get the first bill I find they have added an Accessory Repayment Option for $240 to cover the cost of the charger and lead. [Whirlpool Forum]

Telstra’s own forums are full of stories (archive) of people getting lied to and charged for Accessories they were told were free.  One particularly bad story was:

I questioned the salesman and he assured me it was “free” and “part of the package”.  When I got home I read in the contract some talk of an “ARO” at $10 per month over 24 months.  Further research on the Internet suggests that this is a scam.

It seems that every time I deal with Telstra their staff trick me (happened once before with a free iPad that ended up costing me $20 per month). [Telstra Forum]

Eventually I submitted a formal email complaint listing out what had happened, and the remedy I wanted. I asked for a formal apology, and the ARO to be removed and the money which had been illegally taken from my account returned.

A few days later, a staff member from Telstra in Australia called me, confused as to my complaint. “You feel that you have been scammed?”, he asked as if such a thing has never happened before at Telstra.

Unfortunately, as I have learned first hand, some Telstra franchisees engage in deceptive and illegal practices as part of their standard mode of operation.

As of writing I’m still waiting on my letter of apology from Telstra and the franchisee at Fountain Gate Level 2 Telstra Store, however I did get a $240 credit on my account.

Update:  I want to note that not all licensees engage in this deceptive behaviour. Customers have come forward from the following stores with alleged stories on being scammed with similar deceptive practices: Vita Group Stores, Plenty Valley Westfield, Moonee Ponds, Albury, Fountain Gate Level 2.

Several licensees have reached out to me directly to object to the way I had initially painted all licensees with the same brush, and for that I am sorry. It does however highlight the damage that such unethical practices do to the Telstra Brand, which affects all licensees including those who run their business ethically.

Please feel free to leave your positive and negative experiences with Telstra ARO’s below, whether you’re a ex-employee, current employee (use a fake name and fake email), licensee or customer.

32 Replies to “How Telstra scammed me out of $240 by lying about free accessories and using an ARO.”

  1. Hi Luke, I’m a Licensee of two stores that do not misled our customers with accessory options. This is evident by our award winning customer service results, provided by our customers.
    To brandish all of us with same brush is also misleading and deceptive to your readers, so if you’re going to take a high moral ground on a subject, you might want to live by it yourself.

    I can appreciate your experience has been poor and has left you disappointed and frustrated.
    You should also know for the purpose of educating people about this piece that buying accessories on your bill is an option for everyone and is also offered/sold in telstra owned stores.
    Happy to provide you more information if you require it.

    1. Hi I am afraid that I must agree with Luke that when in the Telstra shop accessories are given to you and described as “free” with your phone. You are not given an option would you like to have these items and pay $10.00 a month ($240.00) in which case in my case I would have said a definite no thank you. It is only if you happen to notice the charge on your bill that you become aware, as you assume that Telstra is above puttting any extra charges for accessories which you have been given for free in the small print of a Contract. As well as the fact that they did not mention the phone on the plan was Lease, again I would have said I don’t want a lease plan together with it being a swap plan which is of no interest to me.
      I am extremely unhappy with Telstra at the moment as I am also paying for the so called free IPad now after my husband was talked into and upsold a new bundle which meant we broke our old contract and are now paying for that said free item. Everyone should be made aware of these business dealings of Telstra and if you search you can find a lot of other people have been caught in exactly the same way with these free items .

  2. I’m an ex Telstra employee and I’d really like to give you all some light on this.

    These are not free. You pay $10 a month extra for these. Do not get these, the accessories are crap and it’s not worth it.
    The licence you’re looking at is Vita Group Limited. They own 105 Telstra stores nation wide and they’re in deep shit with Telstra. REPORT THEM TO TELSTRA, MAKE COMPLAINTS AND MAKE SURE YOU SAY YOU WENT TO A VITA STORE! Include the picture of the billboard please!!

    As an ex employee I will admit anything anyone wants to know. Vita is a dirty company and unfortunately I had to “trick” customers into getting these or risk getting fired. I ended up getting fired anyway but I cannot express how anxious I was to go to work and have customers abuse me because I was pressured immensely by managers to be doing this.
    This is morally wrong and the biggest reason I have not returned to Vita.

    Please please please help bring this company down!

  3. I was also scammed by a Telstra franchise at Riverton Forum Perth. Before purchasing the phone I had heard something from a friend who also incurred these charges but thought perhaps may had been an error, who would think it would be legal for a company to say one thing then do another. So when the man asked if I was interested in the free accessories I said I was but only if I was not going to be charged for them as my friend did. He assured me that what had happened to my friend was likely just a misunderstanding so I went ahead. Surely on my first bill there was an accessory repayment option fee. I called Telstra numerous times who assured that the fee would be waived. I was then charges an accessory repayment cancellation fee of $15 rather than the monthly $10 which I assumed would be the last of it. The next month the $10 fee was back. From then on everytime I called to try and have the repayment fee taken off my account it cost me an extra $5 for the $15 Accessory repayment cancellation fee. Considering each call takes you 30 minutes to get to talk to someone to explain your story over and over just cost you extra money I gave up. I have never used Telstra again I also talked my boss into cancelling all their Telstra contracts after being a loyal Telstra customer for over 30 years. This was one of half a dozen issues with Telstra over the years. They are a cunning disgraceful unprofessional greedy disrespectful company, one of the absolute worst!!!!

  4. Same has just happened to me in the Geelong CBD store I’m mad as hell! Not only that I received my first bill today via email with a late fee charge. The bill was only sent to me this morning!

  5. Hello,

    I just started the petition “Telecommunications Industry Ombudsman: Put an end to Testra’s “Accessory Repayment Option” or “ARO” fee” and wanted to see if you could help by adding your name.

    My goal is to reach 100 signatures and I need more support. You can read more and sign the petition here:

  6. Exactly the same thing happened to me and eventually they removed the monthly fee and refunded the payments I had made without realising that I was being scammed. But, after the removal, the next bill stated “Accessory Repayment Option Cancellation Fee” was on my bill with the fee being $118.33. Countless communications with Telstra’s 24/7 Contact online with constant promises that someone would telephone me to no avail and so I did what I should have done a month earlier and gone to the TIO. As soon as I did, I received not one, but two calls from Telstra with the promise that they will place a credit of $118.33 on my next bill. This came on the day the bill with the fee was paid by direct debit hence the credit next month. To all those who battle Telstra, make a report to the Telecommunications Industry Ombudsman setting out the facts and the reference number which Telstra gives you to generally fob you off and go from there.

  7. Was told i was getting a accessorie gift pack just found out im being billed $15 a month . For what isnt even worht more than 50 . Thats ok no one at telstra wants to help so ill cancel averything myself and family have with them and move on . Its not the money but the dishonest way this was done

  8. Happened to my wife at Telstra Willows in Townsville. We ended up having to go to the TIO to get our money back.

    1. Hey there, this has happened to me at Willows Telstra in Townsville as well, and I’m just in the process of going through trying to sort it and online telstra 24×7 is giving me the run around. I’m going to contact the TIO, but did you have to contact the Willows store as well? Just wondering what other hoops I need to jump through before contacting TIO? Thanks so much!

  9. My husband andI also experienced the same thing at the Telstra Shop in Mt Barker SA. Manager is denying we were told it was free. I have lodged an online Complaint form to Telstra – just waiting for a response. I’m furious because it was only yesterday my husband got his ‘free’ accessories – shameful practice!

  10. Hi Luke
    It gets better. I’m one of those with the ARO option as the deal quoted was a price and this ARO is included (it wasn’t explained to me at any point), but if I still paid the quoted amount I was satisfied albeit oblivious to the process. What really stung was I took up the option to renew the phone within 12 months of a 24month contract and asked the salesperson what out of pocket expenses I would incur. As the cost to do this was $99 (part of the plan and T&Cs) I was again happy to pay this. The kicker came when the “Accessory Repayment Option Cancellation Fee” for the previous phone was added to my next bill. At NO time was I advised of this fee as I only now understand the ARO process. The orignal phone purchase was “these accessories are included when you get the phone” not that you will be paying it off and if you change or terminate the original contract you will pay an outstanding amount. I have contacted the store in question and am awaiting a call within 3 business days. Otherwise I will be contacting the ACCC for advise and complaint.

    1. Yep i have 3 sims for the kids supposedly not under contract, but the fake accessory is a 2 year contract.
      As if anyone would agree to paying off a phone case over 2 years.
      Time for Telstra to answer to this fraud.

  11. Yep….my husband’s phone contract was recently over, so
    he decided to sign up for an I Phone 8…..I was on a Go Mobile Plus BYO Plan….the female tried to talk us into my getting a new phone plan….we said no no no…then she offered us a ‘free gift’ of an Apple Ipad….with the ‘Option’ of a mobile tablet plan, but only an option if we wanted mobile data on the tablet….we said no….but yes to the ‘free tablet’….we asked and checked with her several times, but yes it’s a free gift (we had her on speaker phone, so both heard all of this). She even told us it was because we were 20+ years customers.
    Got the bill, complete with the Mobile Tablet plan we ‘didn’t agree to’ plus delivery charges (not mentioned) contract charges (not mentioned)….so an initial charge of $62.15 plus an ‘ongoing’ Tablet Plan’ for $29 per month….pretty sure that’s not free.
    We contacted Telstra today and dealt with a very nice young man….however….he was apologetic, repeated back to us accurately all we told him about it being free and our thinking we were scammed (great phone technique), but politely explaining that it was not free. Apparently, we were meant to receive a SIM card with it……We absolutely did not receive a SIM card…which we would not even be looking for, since we had told the lady NO to a Mobile Plan for the I Pad…….so today (with the young man on the phone) we searched high and low in the packaging (which fortunately we had retained carefully), but alas, no SIM card… that’s immediately dodgy……right?
    Anyway, we are hearing from a ‘supervisor’ tomorrow…but it seems our options are to send it back or pay what they are now asking…..
    Of course, we have been happily using it for the past month, loading all our ‘stuff’ onto it….so don’t really want to give it back….so maybe that’s what they count on? Of course we will keep it, but that’s not the point, right?
    I think things have changed up at Telstra, maybe they have to compete more ruthlessly….maybe their contractors etc are told to meet certain quotas and have to use these tactics?
    Never had reason to distrust them in the past and like I mentioned, have been 20+ plus customers for mobile….but I guess now the old adage of ‘get it in writing (official Telstra Email)’ first, before buying might be a good idea?? For us, being country people and business people, Telstra coverage is still the most reliable……but sad they are damaging their brand by allowing these tactics….proving it….difficult!!

  12. My 80 yr father recently walked out of a Teltra strore with a new quite expensive mobile plan and one of these great new free?? accessories package add-ons. It contained a range on accessories by a brand I have never heard of before called Onxy. My dad didn’t even know what half the items were so he passed some on to me including the Symphony bluetooth speaker and the Clarity headphones. The product quality was average/ok and as I got them for free I as more than grateful.

    As I had never heard of the brand I did some research online and pretty much the only footprint I could find was the slick Onxy Australia webstore, which did not contain any links to contact them or any details such as an ABN. I was very shocked to see the pricing on the website, $346 for the speaker and $262 for the headphones. They were not worth anywhere near that pricing tier. A few days later I noticed a product identical to the speaker with different branding on an American website for $40!! It seems Onxy is just cheap Chinese goods re-branded as a premium product at an inflated price for the Australian market.

    The big question is why does the Telstra store at Foutain Gate offer such items in their packages and tell people the package is worth a lot more than it really is.

    1. The Sunbury Store rep was boasting that he had a connection with an old lady at the local church who brought someone in every day for him to sign up. I bet they have lots of accessories they don’t know they are buying.

  13. Has happened to my grandparents over several years at the Honrsby Telstra store. They have paid $100s if not $1000s in AROs after being tricked by salespeople. At one stage they had around 6 extra sim cards attached to their account from all the “free” tablets they had been given, not to mention the AROs on the tablets themselves, cases etc.

    I don’t think you need to clarify that it isn’t all stores, everyone knows that there are good and bad eggs. If the stores that do the right thing don’t want their name tarnished they should speak up and start fighting from within. Go to your state meetings, complain to upper management that your fellow Telstra representatives are practicing shady and illegal scams to trick consumers. It’s time for all of Telstra to take responsibility for their staffs actions.

    1. I am a licensee who does not engage in these practices and we have a strict policy and training around this specific issue with our staff to ensure it doesn’t happen within our store, however much time and stress is spent with customers who have been caught out either by the telstra call centres directly, or other unscrupulous and often larger stores.
      I can also tell you many telstra licensees have been and continue to be reporting this behaviour often, at every opportunity. Nothing ever changes and you are right, it ruins our reputation and makes what is all ready a difficult industry to survive in, even tougher.
      And it is not the only deceptive practice that occurs. A few other examples:
      *the NBN rollout, particularly in regional centres saw an influx of business centres walk into businesses directly, advise that they were from the NBN and there to arrange the changeover, ask for a signature to arrange the transfer and never be seen again, leaving customers locked into telstra NBN contracts with little to no information about what happened next and what was required of them
      *Business account customers will sign up with one smaller licensee and telstra will refer their account to a larger business centre who will then call and advise that they are now their account managers and imply that they now have no choice but to deal with them and them only (not the case, they can 100% choose who they deal with)
      Vitagroup continues to not only dominate with the amount of stores with no consequence but are continuing to expand and be approved for more licensed stores.
      Our advice: report report report these stores, do not give up in defeat and use the complaints link above to make the complaint formal and in writing. Insist that they go back and review the recordings of calls if applicable. Report to the ombudsman.
      Secondly, look for the little independent guys, often operating under their own brand, the ones who are more likely to value the repeat business and who want no part in these practices. Test them, any store worth their salt will offer the ARO and fully explain its implications. When you find that store, value them and support them! Don’t sign for other services with anyone else and always seek their advice without ever committing to anything else elsewhere, sign their praises in customer satisfaction surveys and leave them glowing online reviews, so that others looking for telstra representation choose their store over the others. It all makes a big difference.

      1. Sunbury store has added this scam to 7 numbers, even to just a sim card they added some accessory charges. They just put some junk accessories in a bag and say “these are for you” That junk is now going to cost me nearly $2,000.
        Surely this is something the ACCC should be shutting down.

  14. Hi Luke, I found your page in a google search. In March 2018, I renewed my new phone feeling contract at a Telstra store in my area. I was told to select $300 worth of phone accessories as part of a promotion. I queried the assistant a number of times. I did so.

    I pay my bills automatically and it was not until a year (March 2019),, when I obtained a replacement phone on a new phone feeling contact, I checked my first bill to see a $176.25 fee on there for cancelling the accessory options.

    I had no idea what that was, so I contacted Telstra and was advised to see the Manager at the shop. An assistant spoke with me but after running it past the Managers, I was told I had signed the contact and they would do nothing. I then contacted the Telecommunications Ombudsman.

    My bill arrives by email and because it never changed, I had no reason to check it. I did not check the contact as I trusted Telstra after being with them for 40 years.

    I’m waiting for a response from Telstra.

  15. I just got done at the Mittagong store. I even went in and said I did not want a lease or accessories.
    The guy convinced me the lease was cheaper and included insurance. This I thought ok because screens break at cost a fortune to replace etc.
    He went out the back and came back with a hand written plan and explained if I bought the phone as opposed to buying it I would be paying $15 a month more. This was actually a fib as he failed to remove the lease fee, insurance and accessories con.

    Then he sent me away for a free coffee while he set up my phone was screen protector, case, and put a wireless charger I already said I did not want in a bag.

    As I am about the leave he casually mentions a 100 dollars will be on my next bill for a $5 phone case I did not say I wanted or even like. He did then mentions by the way- there will be $5 a month on your bill for the wireless charger worth $20 a month from Kogan. All after he spent hrs mucking me about and the store I entered at 3 is about to close 5:30.
    He had my phone so I can’t even verify his lies.
    So furious and will be taking this further.

  16. yeap, scammed here too by the Telstra shop at Kippa Ring Qld. I was told the accessories were included in the package, then i later find out i’m paying $360 for crap i didn’t even want. I’ve since read it’s common practice. It’s how the stores makes their money, by shafting people and the orders are from the management.

  17. I am a small business owner who had the worst experience with a system sold by a Telstra store. The system never worked and we were constantly overcharged. We have over 1000 emails of complaint. I also have an email from Telstra admitting fault. They then signed us up for a second system which they charged for but never delivered. We are now trying to sue for compensation – but it is a David and Goliath ….does anyone know any other small businesses that have been sold a bad system .

  18. I think the telco price wars is partly to blame for this. The competition amongst the three telco providers has led to a price war which has seen a decrease in overall prices of the plans. This is good news for the consumer. However, bad for an independent franchisee owner. It cuts into the profits. The only way to make up for the lost money is to provide “free” accessories to balance the books and keep the business afloat. It is absolutely not the right thing to do. It is highly unethical. In most cases, the prices for these accessories are very steep. You could get the same product for at least 30 percent lesser online.

    Moreover, not only Telstra, Optus and Vodafone also seem to be employing similar “free” tactics. In a nutshell, I learnt the hard way that there is no such thing as free lunches, especially when it comes to telcos. The entire culture has been cultivated to con the consumers. And the worst thing, they take pride in it.

  19. Hi all, I can confirm the way consultants at Vita stores sell AROs and HROs is totally immoral. I worked in a Vita Group store and the manager used to tell me to create bundles and use the phrase “it’s included in the price I gave you.” Only once I became unhappy due to these unethical sales practices, the manager used to ask us to break the costs down in case she would be dobbed in for unethical sales practices which is against Telstra’s licence agreement with Vita. However, sales reps within the store still sold the AROs and HROs the same way and the manager turned a blind eye to it.

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