Optus Faces Legal Action for Selling Unwanted Products to Vulnerable Consumers

Signs over an Optus shop front in Albany, Western Australia, on Nov. 22, 2023. Susan Mortimer/The Epoch Times

The Australian Competition and Consumer Commission (ACCC) is suing Optus for allegedly engaging in “unconscionable conduct” by selling telecommunications products to vulnerable customers.

Many of these individuals include Indigenous Australians from remote and regional areas, as well as those living with disabilities or in financial disadvantage.

The ACCC has commenced proceedings in the Federal Court against Optus Mobile Pty Ltd, claiming the company sold goods and services to hundreds of consumers that they “often did not want or need.”

The telecommunications giant even reportedly pursued consumers for the resulting debts from these sales.

The ACCC is seeking penalties, consumer redress, publication orders, a compliance program, and costs.

Allegations of Vulnerable Consumer Exploitation

According to the ACCC, impacted consumers often faced vulnerabilities including diminished cognitive capacity, mental disabilities, or financial dependency. Many were unemployed or lacked adequate financial and legal literacy.

The ACCC alleges that Optus’s conduct disproportionately affected these vulnerable groups, which were incentivised by commission-based remuneration for sales staff.

ACCC Chair Gina Cass-Gottlieb emphasised the seriousness of the allegations, stating that the case involved selling goods to consumers who did not want or need them and, in some cases, could not afford them.

These concerns were reportedly raised by the Telecommunications Industry Ombudsman, which referred complaints about Optus’s sales practices.

Inappropriate Sales Practices at Optus Stores

The ACCC’s investigation revealed alleged unconscionable conduct at two Optus-licensed stores in Darwin, where staff reportedly engaged in inappropriate sales practices for over two years leading to June 2023, allegedly with senior management’s encouragement.

These practices included failing to conduct necessary coverage checks despite many consumers living in areas without Optus coverage.

“Australians living in regional or remote communities were unable to have coverage and unable to work,” Cass-Gottlieb added.

Furthermore, the ACCC asserts that Optus staff manipulated credit checks, oversold accessories, and sold consumers products they could not afford.

Approximately 363 consumers were reportedly affected at the Darwin locations alone.

Further allegations include instances at the Optus store in Mount Isa, where a staff member is said to have created fraudulent contracts, resulting in 42 consumers from Mount Isa and remote North Territory areas being pursued for debts on contracts they did not authorise.

The Chair alleged that the conduct continued after management became aware of the failings being exploited by staff.

“This conduct is unacceptable to the ACCC. It is unacceptable to the Australian community,” she stated.

Individual Consumer Experiences and Broader Implications

The consequences of these practices have been severe. Many consumers suffered significant financial harm, accumulating thousands of dollars in debt. Additionally, they experienced non-financial impacts, including shame, fear, and emotional distress from debt collection pursuits.

“Thankfully, many consumers were supported by financial counsellors, carers, and advocates who helped them seek resolution of Optus’ conduct,” Cass-Gottlieb noted.

The ACCC’s action against Optus highlights the urgent need for consumer protection in the telecommunications sector, particularly for vulnerable individuals.

Optus Announces Remedial Measures for Affected Customers

Within hours of ACCC’s action, Optus announced it would provide refunds, waive outstanding debts, and allow affected customers to keep their devices.

Optus Interim CEO Michael Venter expressed regret for not addressing these issues more swiftly in certain cases, stating that disciplinary actions, including terminations, have been taken against staff responsible for exploiting vulnerable customers.

“Optus has reviewed its sales practices over the past three years, focusing on vulnerable customers. This has resulted in new sales systems for better oversight, mandatory training, and IT improvements to prevent future misconduct,” it added.

For vulnerable customers, it introduced a customer advocacy program to improve management. It has also invested over $5 million to establish a dedicated care team and develop a new vulnerable customer policy.

It has also implemented robust governance and quality assurance programs, along with changes to credit controls and bad debt monitoring.

An improved coverage assessment tool is being introduced at the point of sale to better serve customers. All customer-facing staff will also receive enhanced mandatory training on supporting vulnerable customers.

To strengthen its commitment, Optus is appointing a customer advocate. This role will collaborate with community groups, financial counsellors, and internal teams to enhance support for customers in need.

“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,” it concluded.