Optus faces $100M penalty over ‘unconscionable conduct’

Optus is facing a $100 million penalty imposed for “unconscionable conduct” when selling goods and services to over 400 consumers.

The penalty relates to Australian Competition and Consumer Commission (ACCC) action brought against the telco in October last year for the actions of 16 Optus stores between August 2019 and July 2023.

At these stores, a number of consumers were sold products they did not want, could not use or could not afford.

Many of those affected were vulnerable or experiencing disadvantage, the ACCC said, such as living with a mental disability, diminished cognitive capacity or learning difficulties, being financially dependent or unemployed, having limited financial literacy, or English not being a first language.

Additionally, a large number of these consumers were First Nations Australians from regional, remote and very remote parts of the country.

In some cases, consumers were pursued for debts due to these sales.

EDGE 2025

As part of an agreement, both the ACCC and Optus have asked the Federal Court to impose a total penalty of $100 million on the telco for breaching Australian Consumer Law. However, it is up to the Court to decide if the penalty is appropriate.

Optus admitted its staff acted unconscionably during the period, with the infringing conduct including placing undue pressure on consumers, failing to explain terms and conditions to vulnerable consumers, not having regard as to whether the consumers had coverage from the telco and misleading consumers to think goods were free or included in bundles for no additional cost.

The telco has also signed an undertaking, which has been accepted by the ACCC, that it will compensate impacted consumers and improve its internal systems after the Court makes relevant orders.

“The conduct, which included selling inappropriate, unwanted or unaffordable mobiles and phone plans to people who are vulnerable or experiencing disadvantage, is simply unacceptable,” ACCC deputy chair Catriona Lowe said.

“During our investigation into this case, the ACCC heard many stories of the impact of this conduct on affected consumers.

“Many of these consumers who were vulnerable or experiencing disadvantage also experienced significant financial harm. They accrued thousands of dollars of unexpected debt and some were pursued by debt collectors, in some instances for years.”

Lowe also said that it was not surprising, and added it should have been anticipated, that the situation caused “many of these people significant emotional distress and fear”.

“We are particularly concerned that Optus engaged debt collectors to pursue some of these consumers after it had launched internal investigations into the sales conduct,” she said.

“Optus has admitted to this conduct and has appropriately committed to changing its systems. It has begun compensating affected consumers.

“We are grateful to the many advocates, financial counsellors and carers who assisted the impacted individuals. We also thank the Telecommunications Industry Ombudsman for their role in drawing these issues to our attention.”

Optus CEO Stephen Rue said that the conduct of the telco’s stores was “inexcusable and unacceptable”. 

“I would like to sincerely apologise to all customers affected by the misconduct in some of our stores,” he said.

“Optus failed these customers, and the company should have acted more quickly when the misconduct was first reported.

“I am leading the implementation of extensive changes across the company with active responses to the issues raised well underway.”

The telco said Rue has made numerous executive and senior leadership changes. Additionally, disciplinary action has been taken in some circumstances, with retail staff responsible for the infringing action having been terminated.

“This is not what Optus stands for and we will hold ourselves to a higher standard going forward,” he added.

Other actions Optus has taken include changes to structural accountability, new sales incentives introduced, an agreement to pay $1 million to support First Nation Australians’ digital literacy and hiring financial counsellors to provide support and guidance to the remediation process.

EDGE 2025