The ACCC claims most of the impacted consumers were First Nations Australians from regional and remote areas or people from culturally and linguistically diverse backgrounds. Photo: Optus.
Optus is being taken to the Federal Court by the Australian Competition and Consumer Commission (ACCC) over allegations the telecommunications company sold hundreds of consumers products they did not want or need, and in some cases then pursued customers for debts resulting from these sales.
The ACCC has launched proceedings against Optus Mobile Pty Ltd (Optus) for allegedly having engaged in unconscionable conduct, which is out of step with Australian Consumer Law.
ACCC chair Gina Cass-Gottlieb said Optus’s conduct disproportionately impacted consumers experiencing vulnerability and/or disadvantage. This included those living with a mental disability, diminished cognitive capacity or learning difficulties, being financially dependent or unemployed, or having limited financial and legal literacy.
Ms Cass-Gottlieb noted these practices were incentivised by the commission-based remuneration for sales staff, even when they knew contracts were created fraudulently.
“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,” she said. “We also allege that Optus’ unconscionable conduct continued after management became aware of deficiencies in its systems that were being exploited by sales staff, and despite this, failed to implement fixes.
“This case concerns allegations of very serious conduct, as our case is that Optus sold goods to consumers experiencing vulnerability which they did not need, did not want and could not afford.”
The ACCC’s case involves dealings with 429 consumers, of whom 363 were First Nations Australians from regional and remote parts of the Northern Territory – where Optus coverage was not available.
While these consumers came from two licensee-operated Optus stores in Darwin, the alleged conduct also involved 42 consumers from the company’s Mount Isa store and 24 individual consumers from store locations across Australia.
Staff are alleged to have put undue pressure on some of these consumers to purchase a large number of products, including expensive phones and accessories, and not undertaking coverage checks to inform the consumer whether they would have Optus reception where they lived.
It is also alleged that Optus engaged debt collectors to pursue many of these consumers despite knowing they were subject to inappropriate or fraudulent sales conduct.
Source: ACCC.
The ACCC began its investigation into Optus following a referral by the Telecommunications Industry Ombudsman. Now the competition regulator is seeking declarations and orders for penalties, non-party consumer redress, publication orders, a compliance program and costs.
“We are taking this action against Optus and seeking consumer redress in relation to the hundreds of consumers affected by this alleged unconscionable conduct,” Ms Cass-Gottlieb said.
In response to the action, Optus Interim CEO Michael Venter apologised on behalf of the company to all customers affected by this misconduct and for the distress caused.
“We are remediating affected customers, including by providing refunds, waiving outstanding debts and enabling them to keep devices,” he said. “We regret that we did not remediate more quickly in some of these cases.
“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.”
While the Interim CEO noted the majority of these sales had occurred at three licensee-operated Optus stores, Mr Venter said the company “does not tolerate employee behaviour which takes advantage of customers”.
“We have taken disciplinary action (including terminations) against staff whom we determined were responsible for this misconduct involving vulnerable customers,” he said. “We have cooperated with the ACCC in this investigation to date, will continue to do so and are committed to continuing to improve our processes in relation to customers experiencing vulnerability.”
Over the past three years, Mr Venter said, Optus had undertaken a major review of how it managed sales, bringing in new systems that provided more oversight. The telco also had implemented extra, compulsory training programs and enhancements to its IT systems to help prevent misconduct in sales to vulnerable customers.
