Optus, a prominent telecommunications company in Australia, recently faced a hefty penalty from the Federal Court. Following accusations by the Australian Competition and Consumer Commission (ACCC), the court fined Optus AU$100 million (approximately US$66 million) for its exploitative practices against vulnerable customers. From January 2019 to September 2023, Optus engaged in predatory sales tactics, as exposed by the ACCC.
Justice O’Sullivan branded the company’s actions as “appalling” and a “manifest betrayal of trust.” The court found that sales staff, motivated by commission-based incentives, targeted marginalized individuals. These included the elderly, those from remote communities, and people with cognitive or intellectual disabilities.
The concerning conduct was prevalent across 16 stores nationwide. Sales teams employed deceptive methods, pressuring customers into buying unnecessary products and plans. They often sold services to residents in areas lacking Optus network access.
During the court proceedings, a particularly disturbing case came to light. It involved a man, deaf and mute with partial amputations, who was tricked into four contracts worth more than AU$7,500. Despite efforts from his support worker to communicate his inability to manage these contracts, the company initially refused assistance. Additionally, a woman with cerebral palsy and ADHD was trapped in 24 contracts. Misleading credit practices further saddled her with debt, significantly affecting her financial stability.
The court determined that Optus’ systems facilitated fraudulent activities by allowing staff to bypass credit controls. This oversight led to instances where sales far exceeded customer financial capacities. The internal environment within the company’s Darwin stores, as an example, revealed “pervasive” misconduct affecting hundreds of customer accounts. Compounding the issue, some managers even instructed junior staff in deceitful practices.
Management’s inaction played a critical role in the court’s decision. Justice O’Sullivan criticized Optus senior leaders for ignoring problems for years. Evidence showed they were aware of fraudulent actions, including contract creations without customer knowledge, but did not intervene. Particularly troubling is that the majority affected were First Nations Australians, subject to aggressive debt collection.
Further scrutiny revealed misleading information provided by Optus to the Telecommunications Industry Ombudsman. The company’s denial of targeting vulnerable customers contradicted internal findings, a move the court condemned as “disgraceful.”
The AU$100 million penalty reflects the gravity of the situation. Beyond the financial consequences, Optus must bear the ACCC’s legal costs and disseminate corrective notices across multiple platforms. The company has also pledged to reform its practices by appointing a senior compliance officer, revising commission schemes, and enhancing staff training. Moreover, Optus plans to reacquire 34 stores involved in the misconduct and commit AU$1 million to advance digital literacy for First Nations Australians.
