The Federal Court has ordered Optus Mobile to pay $100 million penalty for engaging in unconscionable conduct in the sale of mobile phones and contracts, and for subsequent debt collection practices affecting hundreds of Australians. The case was brought by the Australian Competition and Consumer Commission (ACCC) after Optus admitted to breaches of the Australian Consumer Law.
Unconscionable Conduct Targeting Vulnerable Consumers
A statement from ACCC said the Court found that many of the affected consumers did not want, could not use, or could not afford the phones and contracts sold to them. Some were unfairly pursued for debts resulting from these transactions. Many impacted individuals were vulnerable, including:
People living with mental disabilities, cognitive impairments, or learning difficulties
Individuals financially dependent or unemployed
Consumers with limited financial literacy or non-English speakers
First Nations Australians living in regional, remote, or very remote areas
ACCC Deputy Chair, Catriona Lowe, described Optus’s conduct as “truly appalling,” highlighting the financial and emotional distress experienced by consumers who were unfairly pursued by debt collectors.
Court Statement on Impact
Justice O’Sullivan emphasized the profound consequences of Optus’s conduct, including financial harm, emotional distress, social shame, and the risk of losing access to essential telecommunications services due to inflated costs.
In addition to the financial penalty, Optus has provided a five-year court-enforceable undertaking to compensate affected consumers and improve its internal systems and controls.
Details of Misconduct
The misconduct occurred across 16 Optus stores between August 2019 and July 2023, impacting over 400 consumers. Key examples included:
Applying pressure to purchase multiple products, including expensive phones and accessories, that consumers could not afford or did not need
Failing to explain terms and conditions in a way that vulnerable consumers could understand
Ignoring whether consumers had Optus coverage in their area
Misleading consumers to believe products were free or included in bundles
Notably, at the Mount Isa store, management allowed debts to be pursued even when contracts appeared fraudulently created without consumers’ knowledge. Commission-based sales practices also incentivized inappropriate sales.
Remediation and Consumer Support
Optus’s undertaking to the ACCC includes:
A three-year consumer remediation program
Changes to staff incentives and remuneration to prevent future misconduct
Ensuring certain stores in Northern Territory, regional Queensland, and South Australia are directly operated by Optus
Improvements to complaints handling processes for vulnerable or disadvantaged consumers
A $1 million donation to support digital literacy programs for First Nations Australians
Consumers who believe they may have been affected can contact Optus’s specialist care team at 1300 082 820 or visit the Optus Sales Misconduct Response page.
Context and Industry Comparison
This case follows similar ACCC action against Telstra, which faced a $50 million penalty in 2021 for unconscionable sales targeting First Nations Australians.
Baburajan Kizhakedath
