Optus has agreed to pay a $100 million fine for selling phones and plans to hundreds of vulnerable and disadvantaged Australians, following court action brought by the competition watchdog.
The country’s largest telco admitted to “engaging in unconscionable conduct” and agreed to the penalty — one of the largest fines under Australian consumer law to date — on Wednesday.
The Australian Competition and Consumer Commission took the company to court over its sales practices in October, alleging it sold over 400 vulnerable or disadvantaged customers goods and services they “often did not want or need”.
Many customers were living with disabilities, had learning difficulties, or were First Nations customers from remote and regional areas, the ACCC said. Some customers were also pursued for debts that resulted from those sales.
As part of a settlement, Optus has admitted that its sales staff at 16 different stores across Australia acted unconscionably when selling phones and contracts between August 2019 and July 2023.
Optus and the ACCC will jointly ask the Federal Court to impose the $100 million penalty on Optus for breaching Australian Consumer Law, although the court will ultimately decide on the size of the penalty and make orders.
If accepted, the penalty would be one of the biggest imposed on an Australian company and on par with the $100 million penalty against Qantas last year for selling ‘ghost flights’.
The company has also signed an undertaking, which has been accepted by the ACCC, to compensate impacted customers and improve its internal systems, including changing the remuneration structure of sales staff.
ACCC deputy chair Catriona Lowe described Optus’ conduct as “simply unacceptable”, adding that the watchdog was particularly concerned by its use of debt collectors after it had launched an internal investigation into the sales practices.
“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.
“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.”
In a statement, Optus’ new chief executive Stephen Rue said the misconduct was inexcusable and unacceptable, and that work was underway to “regain our customers’ trust and improve support and protections for them”.
He said the company had already made senior leadership changes, taken disciplinary action and terminated sales staff found to be responsible for inappropriate sales practices.
“I would like to sincerely apologise to all customers affected by the misconduct in some of our stores. Optus failed these customers, and the company should have acted more quickly when the misconduct was first reported,” he said.
Optus is not the first telco to be fined for engaging in unconscionable conduct. In 2021, it was hit with a $50 million penalty for selling mobile contracts to 108 First Nations consumers between January 2016 and August 2018.
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