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So just wasted 6 hours talking online to get a refund from my account was told because I bpayed they can't refund my money is this a thing how can they claim to not be able to refund my money..looks like I'm switching providers then they'll have to settle my account right?
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No it's not a thing. The method that you have paid by has no bearing on them refunding any amount of that is remaining in credit in your account. They can simply send you a cheque if their system does not allow them to enter in new bank account information to process the refund. If they refuse to do that then they are in breach of Australian Consumer Law.
If you can't get it resolved through chat, lodge a formal complaint via https://telstra.com/complaints
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