Optus Mobile, Australia’s second-largest telecommunications provider, has admitted to engaging in unconscionable conduct in the sale of mobile phones and related services to vulnerable consumers, following legal action initiated by the Australian Competition and Consumer Commission (ACCC).
Between August 2019 and July 2023, Optus sales staff at 16 stores across the country sold telecommunications goods and services to over 400 consumers in ways the company now concedes were unfair, exploitative, and in breach of Australian Consumer Law.
ACCC said the misconduct disproportionately affected First Nations Australians and people living with disadvantages including mental disabilities, limited English, financial hardship, and low digital literacy — many residing in remote or regional areas.
The sales practices included pressuring consumers to buy expensive phones, plans, and accessories they didn’t want, couldn’t use, or couldn’t afford. In many cases, staff failed to properly explain contract terms or even verify that the consumer had network coverage in their area. Some customers were misled into believing products were free, only to be burdened with unaffordable multi-year contracts.
Despite senior management being aware of the ongoing misconduct, Optus failed to act swiftly to fix systemic weaknesses. Notably, the company continued to pursue some affected consumers through debt collectors — even after internal investigations flagged fraudulent sales and account manipulation, including falsified identification documents and credit checks.
Optus’s commission-based sales incentives were also found to have contributed to the exploitative conduct, running counter to the ACCC’s recommendations and the Telecommunications Consumer Protections Code.
Under a proposed agreement with the ACCC, Optus and the regulator will jointly seek a $100 million penalty from the Federal Court. The court will also decide on orders for consumer redress and structural reforms.
As part of a court-enforceable undertaking, Optus has committed to:
Compensating affected customers,
Establishing a transparent complaints resolution process,
Improving staff training and complaint handling,
Reforming its debt collection practices,
Revising commission structures to prevent sales-driven misconduct, and
Donating $1 million to support digital literacy among First Nations Australians.
Optus has also begun buying back 34 stores previously run by licensees in regions where much of the harm occurred, such as the Northern Territory, Queensland, and South Australia.
The ACCC action against Optus mirrors a 2021 case against Telstra, which resulted in a $50 million penalty for similar conduct involving Indigenous consumers.
The case highlights concerns over business ethics and compliance controls within Optus’s retail operations. It also underscores the need for telecommunications providers to embed consumer protections into sales practices, particularly for vulnerable groups who are often at the greatest risk of exploitation.
Consumers impacted by Optus’s conduct are encouraged to contact the company’s specialist customer care team at 1300 082 820 for support.
TelecomLead.com News Desk
