Optus has admitted to engaging in unconscionable conduct when selling telecommunications products and services to hundreds of vulnerable consumers, following legal action initiated by the Australian Competition and Consumer Commission (ACCC).
The admissions relate to sales made between August 2019 and July 2023, across 16 Optus stores nationwide.
During that period, staff sold phones, plans and accessories to more than 400 consumers, many of whom were experiencing disadvantage, including First Nations Australians in regional and remote communities.
The ACCC and Optus will jointly ask the Federal Court to impose a $100 million penalty. The Court will determine whether the penalty is appropriate and consider any additional orders.
Consumers sold products they couldn’t afford or use
According to the ACCC, affected individuals were often sold mobile products they did not want, could not afford, or were unable to use.
Many of these customers were living with cognitive or learning difficulties, were financially dependent or unemployed, or had limited financial or English literacy.
Sales staff were found to have put undue pressure on consumers to purchase expensive phones and accessories; failed to properly explain contract terms; ignored network coverage limitations; and misled consumers into thinking certain products were free or bundled at no additional cost.
In many cases, customers were later pursued for debts stemming from these transactions, for years, even after internal concerns about sales conduct had been raised within Optus.
Commitment to compensation and internal reform
As part of the settlement, Optus has signed an undertaking to compensate impacted customers and make systemic changes to prevent similar incidents in the future.
The compensation process will commence subject to the Court’s approval of the undertaking.
ACCC Deputy Chair Catriona Lowe described the conduct as “simply unacceptable.”
“Many of these consumers… experienced significant financial harm. They accrued thousands of dollars of unexpected debt and some were pursued by debt collectors,” Lowe said.
“It is not surprising, and indeed could and should have been anticipated, that this conduct caused many of these people significant emotional distress and fear.”
Industry implications and next steps
The case highlights broader accountability issues for telcos operating in regional and remote markets, particularly when dealing with vulnerable populations.
The ACCC credited community advocates, financial counsellors, carers and the Telecommunications Industry Ombudsman for surfacing the issue and supporting affected individuals.
Optus has begun compensating some customers and has committed to improving its sales processes and oversight.
For consumers who believe they may be impacted, the ACCC encourages swift action.
If you suspect something is wrong with your mobile service or billing, contact your provider or visit scamwatch.gov.au to report your concerns.
IDCARE can also provide support for identity-related issues at 1800 595 160.