Telstra to pay $50m fine for ‘unconscionable’ conduct towards Indigenous consumers

Australian telco giant Telstra has copped a near-record fine for exploitative and ‘unconscionable’ practices against customers.

Telstra cops whopping fine for selling plans to Indigenous customers who couldn’t afford or understand the contracts. Picture: NCA NewsWire / Naomi Jellicoe

Telstra has been hit with a whopping $50m fine for selling mobile phone contracts to more than 100 Indigenous customers who couldn’t understand or couldn’t pay for the plans.

The telco giant was ordered to pay the penalty for unconscionable conduct on Thursday after the Australian consumer watchdog launched legal action in the Federal Court.

Staff at five Telstra stores signed up 108 Indigenous customers to multiple postpaid mobile phone contracts that they could not understand or afford between January 2016 and August 2018.

“Sales staff in these Telstra-branded stores used unconscionable practices to sell products to dozens of Indigenous customers who, in many cases, spoke English as a second or third language,” ACCC boss Rod Sims said.

Telstra has been fined $50m for unconscionable conduct. Picture: NCA NewsWire/Naomi Jellicoe

This included manipulating credit assessments, misrepresenting products as free and “exploiting” the social, language, literacy and cultural vulnerabilities of the customers, he said.

“The $50 million penalty imposed against Telstra is the second highest penalty ever imposed under the Australian Consumer Law,” Mr Sims said.

The company admitted the claims and has since taken steps to waive debts, refund money paid and put in place measures to reduce similar conduct.

The court also ordered Telstra to undertake remediation to affected customers, improve its compliance program, review and expand its Indigenous telephone hotline and enhance its digital literacy program for consumers in remote areas.

Telstra admitted liability, co-operated with the ACCC’s investigation and made joint submissions with the regulator to the court in relation to the penalty and other orders.

The telecommunications company has been contacted for comment.