Optus says it has sacked staff after the Australian consumer watchdog launched a federal court case alleging the telco had sold hundreds of vulnerable consumers – including many First Nations customers – phones and plans they could not afford.
The Australian Competition and Consumer Commission alleged the telco had engaged in unconscionable conduct, in contravention of the Australian Consumer Law, related to its dealing with 429 customers – 363 of which were served at Optus’s Darwin stores.
There were 42 consumers from the Optus Mount Isa store and 24 individual customers from various store locations across Australia.
The ACCC alleged the telco sold goods that the customers did not want or need, and in some cases pursued customers for debt for these sales, with staff incentivised to upsell via commissions.
Many of the consumers were experiencing vulnerability or disadvantage, such as living with a mental disability, diminished cognitive capacity or learning disabilities, being financially dependent or unemployed or having limited financial and legal literacy, the regulator said.
“We allege Optus’ conduct disproportionately impacted consumers experiencing vulnerability and/or disadvantage, and that these practices were incentivised by the commission-based remuneration for sales staff,” the ACCC’s chair, Gina Cass-Gottlieb, said.
“In some cases, we allege Optus took steps to protect its own financial interests by clawing back commissions to sales staff but failed to remediate affected consumers.”
Optus’s interim CEO, Michael Venter, apologised to customers affected “by this [alleged] misconduct and for the distress caused”.
He said the company was refunding customers, waiving outstanding debts, and allowing customers to keep the devices. Venter said disciplinary action, including terminations, had been taken against staff determined to be responsible for the alleged misconduct.
Optus had invested more than $5m in a dedicated specialist care team and developed a new vulnerable customer policy, he said.
The ACCC alleges that Optus put undue pressure on some customers to buy a large number of products, including expensive phones and accessories, while not undertaking coverage checks to see if they had Optus mobile network coverage where they lived. Debt collectors were then allegedly sent to chase payment from many of these consumers, the ACCC said.
In one case, a person living with an intellectual disability was allegedly sold an expensive phone, a business phone contract under a false ABN, a new NBN internet plan and accessories, despite the disability being 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. 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 ACCC said.
The ACCC alleges that at two licensee-operated stores in Darwin, staff engaged in inappropriate sales conduct in a two-year period to June 2023, including not checking mobile coverage before making sales, despite some of the 363 customers being First Nations customers from remote parts of the Northern Territory where there was no mobile coverage.
In Mount Isa, the ACCC alleges that Optus acted unconscionably by pursuing debts for at least 42 consumers from Mount Isa and remote parts of the NT, despite some senior executives knowing that the debts related to contracts which were fraudulently created by a staff member at the licensee-operated store.
The remainder of the cases include claims that sales staff manipulated credit check results to sell goods and services the customers could not afford, without the customers’ knowledge, and failed to explain the terms and conditions of contracts in an understandable manner.
The ACCC is seeking declarations and orders for penalties, non-party consumer redress, publication orders, a compliance program and costs.
The communications minister, Michelle Rowland, said the allegations were “very serious”.
“Telcos must act in the best interest of their customers, particularly those experiencing vulnerability or disadvantage,” she said. “Whether it be grocery prices or telecommunications selling practices, the Albanese government will continue to work with the ACCC to ensure fair outcomes for Australian consumers.”
The chief executive for the Australian Communications Consumer Action Network (ACCAN), Carol Bennett, said the behaviour, if proved, was “unconscionable and appalling”.
“What is alleged simply cannot be allowed to occur in this country and requires decisive action from government,” she said.
In May 2021, Telstra paid a $50m fine for signing up more than 100 Indigenous customers on to plans they did not understand and could not afford, after court action from the ACCC.
