Australia’s second largest telecommunications provider Optus has agreed to pay a $100 million (US$64.9 million) fine after selling phones and contracts to vulnerable and disadvantaged people including indigenous Australians.
The Australian Competition and Consumer Commission (ACCC) said the Singapore Telecommunications subsidiary had admitted to engaging in unconscionable conduct with more than 400 consumers at 16 stores between August 2019 and July 2023.
The ACCC said in many instances the consumers did not want or need, could not use or could not afford what they were sold, and in some cases they were pursued for debts.
Many were vulnerable or disadvantaged, living with a mental disability, diminished cognitive capacity or learning difficulties, financially dependent or unemployed, had limited financial literacy or poor English, or were First Nations people from regional and remote areas.
“The conduct, which included selling inappropriate, unwanted or unaffordable mobiles and phone plans to people who are vulnerable or experiencing disadvantage is simply unacceptable,” ACCC Deputy Chair Catriona Lowe said in a media release.
The competition took the legal action against Optus Mobile Pty Ltd (Optus) in the Federal Court, which will decide if the penalty is appropriate and may make other orders.
Optus has also signed an undertaking that it will compensate impacted consumers and improve its internal systems.
Many affected consumers accrued thousands of dollars of unexpected debt and some were pursued by debt collectors, in some instances for years, even after the company had launched internal investigations into the conduct.
“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,” Lowe said.
The ACCC commenced court action against Optus on 31 October 2024, prompted by a referral from the Telecommunications Industry Ombudsman.
