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Optus sold vulnerable Australian customers phone plans they couldn’t afford, ACCC alleges Optus sold vulnerable Australian customers phone plans they couldn’t afford, ACCC alleges
(about 1 hour later)
Regulator alleges in court case one person living with a disability was sold a phone, a contract, an internet plan and accessories despite not wanting most of itRegulator alleges in court case one person living with a disability was sold a phone, a contract, an internet plan and accessories despite not wanting most of it
Optus sold hundreds of vulnerable consumers – including many First Nations customers – phones and plans they could not afford as well as overpriced accessories, the Australian consumer watchdog has alleged in a federal court case launched on Thursday.Optus sold hundreds of vulnerable consumers – including many First Nations customers – phones and plans they could not afford as well as overpriced accessories, the Australian consumer watchdog has alleged in a federal court case launched on Thursday.
The Australian Competition and Consumer Commission alleged the telco had engaged in unconscionable conduct, in contravention of the Australian Consumer Law, related to its dealing with 429 customers – 363 of which were served at Optus’s Darwin stores.The Australian Competition and Consumer Commission alleged the telco had engaged in unconscionable conduct, in contravention of the Australian Consumer Law, related to its dealing with 429 customers – 363 of which were served at Optus’s Darwin stores.
There were 42 consumers from the Optus Mount Isa store and 24 individual customers from various store locations across Australia.There were 42 consumers from the Optus Mount Isa store and 24 individual customers from various store locations across Australia.
The ACCC alleged the telco sold goods that the customers did not want or need, and in some cases pursued customers for debt for these sales, with staff incentivised to upsell via commissions.The ACCC alleged the telco sold goods that the customers did not want or need, and in some cases pursued customers for debt for these sales, with staff incentivised to upsell via commissions.
Many of the consumers were experiencing vulnerability or disadvantage, such as living with a mental disability, diminished cognitive capacity or learning difficulties, being financially dependent or unemployed or having limited financial and legal literacy, the regulator said.Many of the consumers were experiencing vulnerability or disadvantage, such as living with a mental disability, diminished cognitive capacity or learning difficulties, being financially dependent or unemployed or having limited financial and legal literacy, the regulator said.
“We allege Optus’ conduct disproportionately impacted consumers experiencing vulnerability and/or disadvantage, and that these practices were incentivised by the commission-based remuneration for sales staff,” the ACCC’s chair, Gina Cass-Gottlieb, said.“We allege Optus’ conduct disproportionately impacted consumers experiencing vulnerability and/or disadvantage, and that these practices were incentivised by the commission-based remuneration for sales staff,” the ACCC’s chair, Gina Cass-Gottlieb, said.
“In some cases, we allege Optus took steps to protect its own financial interests by clawing back commissions to sales staff but failed to remediate affected consumers.”“In some cases, we allege Optus took steps to protect its own financial interests by clawing back commissions to sales staff but failed to remediate affected consumers.”
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The ACCC alleges that Optus put undue pressure on some customers to purchase a large number of products, including expensive phones and accessories, while not undertaking coverage checks to see if they had Optus mobile network coverage where they lived. Debt collectors were then allegedly sent to chase payment from many of these consumers, the ACCC said. The ACCC alleges that Optus put undue pressure on some customers to buy a large number of products, including expensive phones and accessories, while not undertaking coverage checks to see if they had Optus mobile network coverage where they lived. Debt collectors were then allegedly sent to chase payment from many of these consumers, the ACCC said.
In one case, a person living with an intellectual disability was allegedly sold an expensive phone, a business phone contract under a false ABN, a new NBN internet plan and accessories, despite the disability being evident to Optus staff.In one case, a person living with an intellectual disability was allegedly sold an expensive phone, a business phone contract under a false ABN, a new NBN internet plan and accessories, despite the disability being evident to Optus staff.
“The person did not want or need the majority of these items, and was upset and embarrassed about the unwanted and expensive items they were sold. When the person’s representative went to the store to return the items, the Optus staff refused to cancel the contracts and it was only through the intervention of a financial counsellor that Optus cancelled the contracts,” the ACCC said.“The person did not want or need the majority of these items, and was upset and embarrassed about the unwanted and expensive items they were sold. When the person’s representative went to the store to return the items, the Optus staff refused to cancel the contracts and it was only through the intervention of a financial counsellor that Optus cancelled the contracts,” the ACCC said.
The ACCC alleges that at two licensee-operated stores in Darwin, staff engaged in inappropriate sales conduct in a two-year period to June 2023, including not checking mobile coverage before making sales, despite some of the 363 customers being First Nations customers from remote parts of the Northern Territory where there was no mobile coverage.The ACCC alleges that at two licensee-operated stores in Darwin, staff engaged in inappropriate sales conduct in a two-year period to June 2023, including not checking mobile coverage before making sales, despite some of the 363 customers being First Nations customers from remote parts of the Northern Territory where there was no mobile coverage.
In Mount Isa, the ACCC alleges that Optus acted unconscionably by pursuing debts for at least 42 consumers from Mount Isa and remote parts of the NT, despite some senior executives knowing that the debts related to contracts which were fraudulently created by a staff member at the licensee-operated store.
The remainder of the cases include claims that sales staff manipulated credit check results to sell goods and services the customers could not afford, without the customers’ knowledge, and failed to explain the terms and conditions of contracts in an understandable manner.
Optus’s interim CEO, Michael Venter, sincerely apologised to customers affected “by this [alleged] misconduct and for the distress caused”.
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In Mount Isa, the ACCC alleges that Optus acted unconscionably by pursuing debts for at least 42 consumers from Mount Isa and remote parts of the NT, despite some senior executives knowing that the debts related to contracts which were fraudulently created by a staff member at the licensee-operated store. He said the company was refunding those customers, waiving outstanding debts, and allowing customers to keep the devices. Venter said Optus does not tolerate such behaviour from employees and disciplinary action, including terminations, had been taken against staff determined to be responsible for the alleged misconduct.
The remainder of the cases include claims that sales staff manipulated credit check results to sell goods and services the customers could not afford, without the customers’ knowledge, and failed to explain the terms and conditions of contracts in an understandable manner. Optus had invested more than $5m in a dedicated specialist care team and developed a new vulnerable customer policy, he said.
A spokesperson for Optus said the telco was “currently reviewing the claims made by the ACCC and will respond in more detail in due course”.
The ACCC is seeking declarations and orders for penalties, non-party consumer redress, publication orders, a compliance program and costs.The ACCC is seeking declarations and orders for penalties, non-party consumer redress, publication orders, a compliance program and costs.
The communications minister, Michelle Rowland, said the allegations were “very serious”.The communications minister, Michelle Rowland, said the allegations were “very serious”.
“Telcos must act in the best interest of their customers, particularly those experiencing vulnerability or disadvantage,” she said. “Whether it be grocery prices or telecommunications selling practices, the Albanese government will continue to work with the ACCC to ensure fair outcomes for Australian consumers.”“Telcos must act in the best interest of their customers, particularly those experiencing vulnerability or disadvantage,” she said. “Whether it be grocery prices or telecommunications selling practices, the Albanese government will continue to work with the ACCC to ensure fair outcomes for Australian consumers.”
The chief executive for the Australian Communications Consumer Action Network (ACCAN), Carol Bennett, said the behaviour, if proven, was “unconscionable and appalling”.The chief executive for the Australian Communications Consumer Action Network (ACCAN), Carol Bennett, said the behaviour, if proven, was “unconscionable and appalling”.
“What is alleged simply cannot be allowed to occur in this country and requires decisive action from government,” she said.“What is alleged simply cannot be allowed to occur in this country and requires decisive action from government,” she said.
In May 2021, Telstra paid a $50m fine for signing up over 100 Indigenous customers on to plans they did not understand and could not afford, following court action from the ACCC. In May 2021, Telstra paid a $50m fine for signing up more than 100 Indigenous customers on to plans they did not understand and could not afford, after court action from the ACCC.