Source : THE AGE NEWS
Optus has agreed to pay $100 million in penalties after landmark legal action from the consumer watchdog over “unconscionable conduct” related to selling vulnerable customers products they could not afford or use.
On Wednesday, the Australian Competition and Consumer Commission and Optus announced they would now jointly ask the federal court to impose a total penalty of $100 million for breaching the consumer law, after the telco admitted its sales staff acted unconscionably when selling phones and contracts between August 2019 and July 2023.
Optus had agreed to pay a $100 million penalty after ACCC legal action.
As part of the penalty agreement, Optus has also signed an undertaking that it will compensate affected customers and improve its internal system, with the federal court to make orders on the amount. The company will also make a $1 million donation to an organisation that helps foster digital literacy among First Nations Australians.
The ACCC launched the legal action against Optus in October, and while the allegations included 429 customers across 16 stores, the telco acknowledged Indigenous Australians were the majority of those affected, primarily at its two Darwin locations and its Mount Isa store.
In many instances, customers did not want or need, could not use or could not afford what Optus staff sold them, with consumers pursued for resulting debts in some cases.
“Many of the affected consumers were vulnerable or experiencing disadvantage, such as living with a mental disability, diminished cognitive capacity or learning difficulties, being financially dependent or unemployed, having limited financial literacy or English not being a first language,” the ACCC said.
ACCC deputy chair Catriona Lowe criticised the telco’s conduct.Credit: Alex Ellinghausen
Optus has conceded its sales staff put undue pressure on consumers to purchase a large number of products, including expensive phones and accessories, that they did not want or need, could not use or could not afford; and also failed to explain relevant terms and conditions.
Many of the affected customers lived in regional, remote and very remote parts of Australia, and the telco has admitted its staff did not have regard to whether consumers had Optus coverage where they lived.
It said its staff also sold products and services which Optus knew or should have known the consumers could not afford; and that employees misled these consumers to believe that goods were free or included as part of a bundle at no additional cost.
ACCC deputy chair Catriona Lowe said: “The conduct, which included selling inappropriate, unwanted or unaffordable mobiles and phone plans to people who are vulnerable or experiencing disadvantage is simply unacceptable.”
“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,” Lowe said.
Lowe said the conduct caused significant emotional distress, and that Optus engaging debt collectors was of particular concern.
