Telstra breached rules on credit management for dozens of customers who were on financial hardship plans, the communications watchdog has revealed
An investigation by the Australian Communications and Media Authority revealed the telco took actions such as suspending or disconnecting services to 70 affected customers.
Under the telecommunications code, telcos must suspend credit management when hardship arrangements are in place.
The investigation found 70 customers were affected between August 2019 and April 2022.
Of those, 22 had services restricted, four had their service suspended and five were disconnected.
Two of Telstra's legacy IT systems were to blame for the action taken by the telco, with the status of affected customers not being updated.
The authority's acting chair Creina Chapman said Telstra and other telcos had a responsibility to customers on hardship arrangements.
"With the pressures caused by rising costs of living and the COVID-19 pandemic, it's more important than ever for telcos to support their customers, particularly those in difficult circumstances," she said.
"Telco services like phone and internet are now essential to daily life ... so even briefly suspending or disconnecting customers can cause a real disruption to their lives."
While issues were resolved for 61 of the affected customers in 24 hours, the authority said there had been a range of issues at Telstra sparked by legacy IT systems.
The authority has formally directed Telstra to comply with the communications code. It could be slapped with fines of up to $250,000 for any further breaches.
"Telstra must continue to address these longstanding issues as a matter of urgency so that its systems can deliver on customer safeguards," Ms Chapman said.
"Protecting telco customers experiencing financial hardship is an ACMA compliance priority and all telcos can expect greater scrutiny of their dealings in these matters."
Telstra customer service executive Kate Cotter said the company was fixing issues with its IT systems.
"We found and fixed the vast majority of these errors quickly but we're sorry that our processes let these customers down," she said in a statement.