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Aussie telco Optus has to pay a $100 million penalty after being found to have aggressively sold unwanted services to disadvantaged customers.
Australian telco Optus has admitted that it engaged in unconscionable conduct regarding the manner in which staff at some of its stores sold goods and services to customers who did not need them or were incapable of using or affording them.
In addition, Optus, in conjunction with the Australian Competition and Consumer Commission (ACCC), will ask the Federal Court to impose a $100 million penalty on the company for being in breach of Australian Consumer Law.
“The conduct, which included selling inappropriate, unwanted or unaffordable mobiles and phone plans to people who are vulnerable or experiencing disadvantage, is simply unacceptable,” Catriona Lowe, ACCC deputy chair, said in an 18 June statement.
“During our investigation into this case, the ACCC heard many stories of the impact of this conduct on affected consumers.”
“Many of these consumers who were vulnerable or experiencing disadvantage also experienced significant financial harm. They accrued thousands of dollars of unexpected debt, and some were pursued by debt collectors, in some instances, for years.”
Between August 2019 and July 2023, staff at 16 Optus stores from around the country sold contracts in breach of consumer law to 400 customers. Staff pressured customers to purchase more products and accessories than was desired, failed to explain terms and conditions, and sold products to customers who may not have had coverage in their areas.
In some cases, customers had limited command of English or were living with a mental disability. In many cases, disadvantaged customers were from First Nations communities in remote and regional parts of Australia.
Optus’ senior management was aware of the aggressive sales practices, which were spurred on by “commission-based sales arrangements”, but the company failed to take proper action to rein in the behaviour. Some customers of the Mount Isa Optus store – which is now closed – were pursued for debts related to goods and services that they had no knowledge of being signed up for.
In another case, an individual with an intellectual disability visited a store with the intention of purchasing a pre-paid recharge for their device. Optus staff pressured this customer into purchasing a new phone and a free speaker for a monthly charge of $30, but later manipulated credit checks to create three separate contracts totalling more than $8,000 over three months.
Optus has said it will also make a $1 million donation to First Nations digital literacy program, review its complaint handling procedures and staff training, and alter the sales structure to disincentivise staff from further predatory practices. The company is also buying back 34 Optus franchises in Queensland, South Australia, and the Northern Territory.
Optus CEO Stephen Rue said in a separate statement that the company’s conduct was “inexcusable and unacceptable”.
“I would like to sincerely apologise to all customers affected by the misconduct in some of our stores,” Rue said.
“Optus failed these customers, and the company should have acted more quickly when the misconduct was first reported.
“I am leading the implementation of extensive changes across the company with active responses to the issues raised well underway.
“However, there is much more to do as we work to regain our customers’ trust and improve support and protections for them, especially for those who are vulnerable.”
Disciplinary action has been taken against some senior staff, while sales staff responsible for the behaviour have been terminated.
“This is not what Optus stands for, and we will hold ourselves to a higher standard going forward,” Rue said.
David Hollingworth has been writing about technology for over 20 years, and has worked for a range of print and online titles in his career. He is enjoying getting to grips with cyber security, especially when it lets him talk about Lego.
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