Microsoft Australia is issuing refunds to some Microsoft 365 subscribers following court action over its marketing practices. While the refunds currently apply only to Australian customers, the case raises important questions about transparency and accountability for Microsoft 365 users worldwide. The move highlights growing scrutiny over how tech giants advertise subscription services and the rights of consumers to fair information.
After an Australian government agency started court action over Microsoft’s failure to disclose all the options available when Microsoft 365 prices were increased. Specifically, the cheaper “Classic” option wasn’t mentioned and only appeared if the customer threatened to cancel.
We previously suggested that Microsoft had two options in response to the court action: Settle or Fight. They’ve chosen to Settle by offering customers the Classic option clearly with a “sort of” refunds for the difference.
It’s a pretty comprehensive “reverse course” by Microsoft, or “Reverse ferret” as they say in Private Eye magazine.
They are making it seem like a unilateral apology but really the company has been forced into this by the Aussie authorities.
The offer
We’ve reprinted the entire Microsoft offer below in the form of the email to customers, in summary …
Australian customers who have Microsoft 365 Personal or Family plan can choose to switch to the cheaper Classic plan (without Copilot):
- Microsoft will refund the difference in plan price (regular vs Classic) between the first renewal after November 2024 and the date of the plan switch.
- The refund will be to the payment method (credit/debit card etc) used for the original purchase.
- Microsoft will do the refund within 30 days of the customer request.
- The customers Microsoft account page will show some mention of the refund when it’s done.
- Affected customers have until 31 December 2025 to decide.
This only applies to Aussie customers who receive the refund offer email from Microsoft direct.
If you’re happy with the current Microsoft 365 Personal or Family plan with a limited form of Copilot, there’s nothing to do.
The hidden traps
Any Microsoft statement has to be read closely for traps. The wording is done very carefully and overseen by many people at Microsoft, so there’s rarely a mistake.
Decades of experience at Office Watch has taught us to look for the traps that Microsoft adds to make things better for their bottom line.
In this case, there aren’t many ‘gotchas’.
Limited refund time?
The refund is based on, what to us, seems like a strange start date.
Customers who now choose a Classic plan get a pro-rata refund from the date they ask for a switch back to “your first renewal date after 30 November 2024“?
Surely a fair refund should be from the date of Microsoft original, misleading, offer which didn’t have the Classic option included?
Instead it’s from a later date when the customer next renewed their Microsoft 365 plan – which could be many months later or never. Some customers might only be eligible for a few months refund or nothing because it’s quite possible to have a Microsoft 365 plan with an expiry up to five years ahead.
This wording seems to us a little trick to reduce the amount Microsoft has to pay customers?
Misleading price quotes
Microsoft’s email to customers continues their trick of quoting only the monthly price of Microsoft 365 plans, rather than the much more common yearly cost.
They do this because it means there’s a lower dollar value shown. How many people are fooled by such a trick?
To correct Microsoft’s statements in their email (see below):
Microsoft 365 [Personal/Family] renews at [
$16/$18 AUD per month$159/$179 AUD per year tax inclusive].
and
Microsoft 365 [Personal/Family] Classic renews at [
$11/$14 AUD per month$109/$139 AUD per year tax inclusive],
Those price quotes are even more outrageous in an email that earlier boasts “Our relationship with our customers is based on trust and transparency“.
Classic plans must auto-renew
Microsoft 365 Classic plans must have automatic renewal (aka “recurring billing”) turned on. We’d heard unconfirmed reports of this but it’s now confirmed by Microsoft in their email to customers.
If you want to continue using Microsoft 365 [Personal/Family] Classic after you switch plans, you’ll need to keep recurring billing enabled.
Aussie Web Site problems
The day that Microsoft sent the offer emails to customers (6 November 2025, see below), Microsoft’s web site was very slow or not responding at all.
We’ve had reports of the Australian site ‘freezing’ when they click the button to switch over to a Classic plan. Other pages get a ‘sorry we’re busy’ page.
The site is seemingly overwhelmed with people responding to their refund email.
On the other hand, Microsoft has enormous server resources and could have easily predicted the great increase in traffic to their Aussie site. A cynic might suggest this is another little ‘passive aggressive’ move to discourage customers from applying for a refund.
Try again in a few days, the offer is open until the end of December 2025 so there’s plenty of time.
UPDATE: Microsoft has now confirmed that ‘some’ links in emails were not working properly.
What about the rest of the world?
Microsoft is very careful to limit the scope of this “refund” offer to just the people who get their email (see below) in Australia.
This refund option is only available to subscribers in Australia who receive this email
What about customers in New Zealand, Malaysia, Singapore, Taiwan, and Thailand? They were the other countries involved in the trial of the Microsoft 365 price increases, back in November 2024?
All those customers received a similarly worded offer with the missing “Classic” option. Or does Microsoft’s promise of “trust and transparency” only apply ‘Down Under’?
Not forgetting all the other global Microsoft 365 customers who received a similar offer in early 2025? Customers in USA, Canada, UK, Ireland, Europe, India, South Africa and elsewhere in the world are entitled to ask their local consumer protection agencies and Microsoft why they aren’t getting the same offer?
Many other countries have similar consumer protection laws to Australia. Quite possibly, Microsoft could be in breach of those laws. A lot depends on the exact wording of the offer in each location, the local statutes and precedents.
Maybe Microsoft will be forced to offer a similar “mea culpa” to all customers worldwide?
Not the end of Microsoft’s problems
The Australian Competition and Consumer Commission (ACCC) which started the action against Microsoft has said the refund offer is NOT part of any out of court settlement.
In addition, the ACCC Chair has said
“We continue to seek penalties, injunctions, declarations, effective consumer redress and costs in court,“
In other words, Microsoft isn’t finished with the repercussions of their actions. The company is presumably hope that their apology and refund offer will help reduce any fines which could be up to AUD $50 million or three times the total benefits that were obtained by the breach or 30 per cent of the corporation’s adjusted turnover during the breach period.
Microsoft’s “refund” email to customers
Here’s the full email that’s been sent to affected customers, as supplied by Microsoft.
The exact wording of the email changes depending on the customers choice of plan (Personal/Family) and renewal (monthly/yearly).
Your Microsoft 365 Options
See your Microsoft 365 Subscription options and refund eligibility
In October 2024, we announced changes to our Microsoft 365 pricing for subscribers in Australia. We recognise we could have been clearer in our communications about the full range of Microsoft 365 subscription options including the option to switch to Microsoft 365 [Personal/Family] Classic. Our relationship with our customers is based on trust and transparency and we apologise for falling short of our standards.
We want to ensure you have all the information you need to make the choice that’s right for you, so we are sharing that information below, including the opportunity to receive a refund.
Option 1: Stay on Microsoft 365 [Personal/Family], your current plan
- Microsoft 365 [Personal/Family] includes the core Microsoft 365 apps plus our AI assistant Copilot and ongoing feature updates.
- Microsoft 365 [Personal/Family] renews at [$16/$18 AUD per month tax inclusive].
- If you wish to stay on Microsoft 365 [Personal/Family], no action is needed.
Option 2: Switch to Microsoft 365 [Personal/Family] Classic and receive a refund
- While Microsoft 365 [Personal/Family] Classic includes the core Microsoft 365 apps and regular security updates, it does not include our AI assistant Copilot and may not receive new feature updates.
- Microsoft 365 [Personal/Family] Classic renews at [$11/$14 AUD per month tax inclusive], the price you paid before the increase.
- If you want to continue using Microsoft 365 [Personal/Family] Classic after you switch plans, you’ll need to keep recurring billing enabled.
- If you switch to Microsoft 365 [Personal/Family] Classic by 31 December 2025, we’ll refund the difference in price between plans, starting from your first renewal date after 30 November 2024. We’ll process your refund to the payment method you use to subscribe within 30 days. Once the refund has been processed, it will be reflected in your Microsoft account. This refund option is only available to subscribers in Australia who receive this email and switch to the Microsoft 365 [Personal/Family] Classic plan by 31 December 2025.
Thank you for being a Microsoft 365 subscriber. We’re committed to making this process clear and improving your experience.
All about Microsoft 365 Classic
Microsoft Faces Legal Action in Australia Over Misleading Microsoft 365 Price Rise Claims
