Optus agrees to pay $100m fine for ‘unconscionable conduct’ between 2019 and 2023

Telco giant Optus has agreed to pay a whopping $100m fine for exploiting hundreds of vulnerable and disadvantaged Australians.

Telecommunications giant Optus has agreed to pay a whopping $100m fine for exploiting hundreds of vulnerable and disadvantaged Australians.

Between 2019 and 2023, the company pushed sales on 400 vulnerable Australians at 16 different stores, selling them products they did not want or need, or could not use or afford.

Many of those impacted were First Nations Australians from regional and remote parts of the country.

Some customers lived with a mental disability, diminished cognitive capacity or learning difficulties, were financially dependent or unemployed, and possessed limited financial literacy.

In some cases, customers were then pursued for debts by third-party collection agencies.

The Australian Competition and Consumer Competition brought court action against Optus and on Wednesday, announced it had reached an agreement with the mobile and internet services provider for the massive penalty.

ACCC deputy chair Catriona Lowe said customers had suffered “significant financial harm” from Optus’ “unconscionable conduct”.

“They accrued thousands of dollars of unexpected debt and some were pursued by debt collectors, in some instances for years,” Ms Lowe 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.”

Optus has agreed to pay a $100m fine for misconduct between 2019 and 2023. Picture: NewsWire / Damian Shaw. Picture: NewsWire / Damian Shaw

Optus senior management became aware staff were engaging in inappropriate sales practices, the ACCC said.

“Optus has admitted to this conduct and has appropriately committed to changing its systems. It has begun compensating affected consumers,” Ms Lowe said.

Optus CEO Stephen Rue has called his company’s misconduct “inexcusable and unacceptable”.

“Optus failed these customers, and the company should have acted more quickly when the misconduct was first reported,” he said.

“I am leading the implementation of extensive changes across the company with active responses to the issues raised well under way.”

Optus - a subsidiary of Singaporean telco Singtel - has now entered into an enforceable undertaking, which will involve making a $1m donation to an organisation facilitating digital literacy of First Nations Australians.

It will also review its complaint handling, improve staff training, and change its debt collection systems among other changes to systems and procedures.

It has undertaken to change the remuneration structure for sales staff to disincentivise them from engaging in similar conduct.

The company has started buying back 34 Optus licensee stores in the Northern Territory, Queensland and South Australia.

Some retail staff who engaged in inappropriate sales practices have been terminated, the company said.

Optus sells mobile and internet services to Australians nationwide. Picture: NewsWire / Christian Gilles

“This is not what Optus stands for and we will hold ourselves to a higher standard going forward,” Mr Rue said.

The referral of debts to third-party collection agencies followed from sales at a store in Mt Isa in Queensland’s northwest, the company confirmed. Two of its Darwin stores also engaged in inappropriate sales practices.

The Federal Court must now approve the penalty.

Financial Counselling Australia director of First Nations policy and campaigns Lynda Edwards said counsellors witnessed the impact of “this kind of conduct” every day.

“People were sold services they didn’t ask for and couldn’t use, in places where there was no coverage,” she said.

“It’s yet another example of systems failing First Nations people.

“Fines are important, but what we really need is structural reform and genuine cultural safety built into how businesses engage with First Nations communities.”

The Optus scandal is not the first to engulf a telecoms company.

In May 2021, Telstra was ordered to pay a $50m penalty for engaging in unconscionable conduct by selling mobile contracts to 108 Indigenous consumers between January 2016 and August 2018.

Originally published as Optus agrees to pay $100m fine for ‘unconscionable conduct’ between 2019 and 2023