Optus apologises for ‘unconscionable’ conduct

Telco giant Optus has apologised to customers after it was sued by Australia’s competition and consumer watchdog for allegedly selling vulnerable, disadvantaged and disabled customers services that they often didn’t want or couldn’t afford.

The ACCC launched Federal Court action against Optus on Thursday, alleging that the company took advantage of hundreds of its customers by selling them overpriced and unaffordable devices and services, then in some cases pursuing consumers for resulting debts.

The allegations involve 429 consumers, primarily in Darwin’s Optus stores, many of whom were First Nations Australians from regional and remote areas, and some of whom were low-income or disabled. The ACCC began its investigation after a referral from the industry ombudsman.

Optus is being sued by the ACCC.Credit: Nikki Short

Optus interim CEO Michael Venter apologised and said the company had taken disciplinary action, including terminations, against staff responsible for the alleged misconduct.

Optus has also introduced changes to credit controls, and additional mandatory training for staff on dealing with vulnerable customers.

“We sincerely apologise to all customers affected by this misconduct and for the distress caused,” Venter said on Thursday. “We deeply regret that in these instances we failed to meet the customer service standards that our customers deserve and should expect.

The misconduct alleged by the ACCC is unacceptable, and completely out of step with our company values and we accept that we need to protect all customers, including those experiencing vulnerability, from this type of behaviour.”

Venter, who will serve as interim CEO until next month when Stephen Rue takes over, said Optus is in the process of appointing a customer advocate in a new role.

ACCC chief Gina Cass-Gottlieb told a Sydney press conference on Thursday she was “shocked” by the breadth of the alleged conduct, and that the watchdog would pursue a “very significant penalty” in the Federal Court. Telstra was fined $50 million for similar conduct in 2021, but only around a quarter of the number of customers were impacted.

Former Optus chief executive Kelly Bayer Rosmarin during a Senate hearing last year. She resigned three days later.Credit: Alex Ellinghausen

“It is of real concern to us in its nature for each of the individual cases, and for it as a whole,” she said on Thursday.

The ACCC alleges that Optus became aware of this type of conduct, but did nothing to stop it.

“So, we are looking at quite specific deliberate conduct at both a sales level and a management level,” Cass-Gottlieb said.

One example given by the ACCC involves a person living with an intellectual disability who went into an Optus store and was sold an expensive phone, a business phone contract under a false ABN, a new NBN internet plan and accessories, though their disability was 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,” the ACCC said.

“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 peak body representing telco consumers, ACCAN, called Optus’ alleged conduct ‘unconscionable’ and said Communications Minister Michelle Rowland should step in to prevent it from happening again.

ACCAN CEO Carol Bennett said the alleged conduct reflected a pattern of behaviour for the telco sector.

“It is a sad day for the telco industry when profits come at the expense of supporting our most vulnerable, and sales incentives drive the exploitation of people who rely on these essential services for their wellbeing and quality of life,” Bennett said.

“The ACCC has alleged grave abuses of Australian consumers by Optus, and intense scrutiny and reform is necessary.

The ACCC has today painted a sordid picture of alleged exploitative corporate conduct at its very worst. What is alleged simply cannot be allowed to occur in this country and requires decisive action from government.”

“The lack of action from the regulator ACMA in this instance once again demonstrates that there is a need for significant reforms to strengthen the enforcement powers and penalties at its disposal.”

Communications Minister Michelle Rowland labelled the allegations as “very serious.”

“Telcos must act in the best interest of their customers, particularly those experiencing vulnerability or disadvantage,” she said in a statement to this masthead.

Optus is also currently fighting legal action brought by the Australian Communications and Media Authority (ACMA) over its 2022 data breach, in which more than 10 million current and former customers had personal information stolen by hackers.

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