Optus faces a $100 million penalty from Australia’s competition regulator following findings that the telco engaged in unethical sales practices targeting unwanted products at customers.
The Australian Competition and Consumer Commission (ACCC) has revealed that many of the affected Optus customers were vulnerable or disadvantaged, including people living with mental disabilities, those who were unemployed, or individuals with limited English proficiency.
A significant number of these customers were First Nations Australians, many of whom were living in regional, remote, and very remote communities across the country.
Optus has admitted its sales staff acted unconscionably, selling phones and contracts to more than 400 customers at 16 stores nationwide between August 2019 and July 2023.
According to the ACCC, staff pressured customers to purchase multiple products such as phones and accessories, failed to check whether Optus coverage was available at their homes, and misled them into believing that certain goods were free or bundled at no extra cost.
Optus chief Stephen Rue says the misconduct was inexcusable and unacceptable. “I would like to sincerely apologise to all customers affected by the misconduct in some of our stores,” Rue said in a statement on Wednesday.
“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.
“However, there is much more to do as we work to regain our customers’ trust and improve support and protections for them, especially for those who are vulnerable.”
Rue said a number of executive and senior leadership changes have been made, and disciplinary action has been taken in some circumstances. This included terminating retail sales staff who were found to be responsible for inappropriate sales practices.
Under an agreement revealed on Wednesday, the ACCC and Optus will together request that the Federal Court impose a total penalty of $100 million on Optus for violations of the Australian Consumer Law.
“It is a matter for the Court to decide whether the penalty is appropriate and to make other orders,” the ACCC stated.
Along with the fine, Optus has signed an undertaking to compensate impacted consumers and improve its internal systems.
“Impacted customers are receiving refunds as part of a remediation approach which is informed by financial counsellors and industry partners to make sure it is fair and reasonable,” it said.
ACCC deputy chair Catriona Lowe described the telecommunication company’s conduct as “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,” she said in a statement.
“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.”
“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.”
At the Mount Isa store, which has now closed, the ACCC said Optus pursued debts in cases where senior management knew the contracts might have been created without the affected customers’ knowledge.
The ACCC initiated court proceedings against Optus in October 2024, following an investigation prompted by a referral from the Telecommunications Industry Ombudsman.
