Optus has agreed to pay a penalty of $100 million after it was found to have engaged in inappropriate sales of products to vulnerable consumers.
According to the Australian Competition and Consumer Commission (ACCC), the misconduct involved the sale of phones and contracts to over 400 consumers at 16 different stores across Australia between August 2019 and July 2023.
Among those affected were individuals living with mental disabilities, reduced cognitive capacity, or learning difficulties, as well as people who were financially dependent, unemployed, or had limited financial literacy or English proficiency.
Many were First Nations Australians residing in regional, remote, and very remote communities.
An example of the sales misconduct Optus staff displayed was putting undue pressure on customers to purchase many products even if they did not want or need them or could not use of afford them.
In other instances, the staff did not explain the relevant terms and conditions in a way that vulnerable consumers could understand, leading to confusion about their ongoing payment obligations.
The staff also sold the products and contracts without regard to whether the customers had Optus coverage where they lived.
In some cases, consumers were misled to believe that the goods were free or included as part of a bundle at no additional cost.
“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,” said Catriona Lowe, ACCC Deputy Chair.
“We are particularly concerned that Optus engaged debt collectors to pursue some of these consumers after it had launched internal investigations into the sales conduct.”
Optus CEO apologises
In a separate statement, Optus said that the reported inappropriate sales of products happened at its stores in Darwin.
Meanwhile, the inappropriate referral of debts to third party debt collection agencies was connected to sales at a store in Mt Isa.
“I would like to sincerely apologise to all customers affected by the misconduct in some of our stores,” said Stephen Rue, Optus CEO.
“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.”
Aside from the proposed penalty of $100 million now considered by the Federal Court for approval, Optus will enter an enforceable undertaking, which includes refunding affected customers as part of a remediation approach.
Optus said the refund process involves guidance from financial counsellors and industry partners to ensure it is fair and reasonable.
In addition, the company will pay $1 million to support digital literacy initiatives for First Nations Australians.
The company will also conduct additional training for frontline staff, roll out more robust credit check processes, and launch a new network coverage check tool to better inform consumers about making purchases.