Around 20,000 NSW-based Optus pay-TV and 18,000 OptusNet users who pay by credit card direct debit were affected by the administrative foul-up. An internal Optus memo yesterday revealed the company does not intend to refund customers, opting instead to not bill subscribers for the month of December.
The revelations have sparked an immediate and stern response from Pinnock, who today told ZDNet Australia Optus had acted in bad faith, and would be forced by his office to refund customers.
"They must reverse the charges. This is an unauthorised transaction, and they're not entitled to these monies because the services have not been rendered," he said.
The office of the TIO was advised by Optus that the transactions would be reversed, Pinnock claimed. "We were advised by Optus a couple of weeks ago that this error had occurred, and that they would reverse the second transaction as a matter of priority," he said. "They seemingly didn't do that."
The TIO will now demand that Optus reverses the transaction. "They need to fix this problem and we'll ensure that they do," Pinnock said. "We'll be in contact with Optus and we'll ensure that this is rectified."
Pinnock went on to accuse the telco of "acting in bad faith" by advising his office the double-billing would be fixed. "The inference from their advice to us is that they would reverse the transaction and we consider that they've acted in bad faith," he said.
Principal solicitor of NSW Consumer Credit Legal Centre, Katherine Lane, described the decision by Optus not to refund customers as "outrageous".
"All those transactions are unauthorised, and must be reversed immediately," she said.
Lane argues the timing of the double-billing is particularly poor -- many families are doing their Christmas shopping, and budget accordingly.
"It's a time of year where people are spending money for the Christmas season, and having money taken out of their account prematurely is a major inconvenience," she said. "[However], the main issue here is that the transaction is absolutely unauthorised."
An Optus spokesperson was unavailable for comment prior to publication.
How big a fine, Optus will suffer will now be an important question to insure that other companies with direct debit authority do not also make "Administrative" errors when their cash flow is short and they decide to "borrow" interest free money from other Australian.