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.

17 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.

  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.

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