Optus Mobile Pty Ltd

The ACCC instituted proceedings in the Federal Court of Australia against Optus on 31 October 2024, alleging that Optus engaged in unconscionable conduct and other consumer law breaches including in relation to consumers who were vulnerable or experiencing disadvantage (Vulnerable Consumers).

The proceedings concern inappropriate sales conduct engaged in by Optus Sales Staff at 16 Optus Retail Stores between August 2019 and July 2023, when Optus Sales Staff entered into contracts on Optus’s behalf with the affected consumers pursuant to which Optus supplied post-paid mobile products and services to the affected consumers. The conduct exploited the Vulnerable Consumers, whose vulnerabilities or disadvantages variously included living with mental disability or diminished cognitive capacity, being unemployed, being financially dependent and indigent, English not being a first language, having limited financial literacy, and/or living with learning and comprehension difficulties. A number of the Vulnerable Consumers were First Nations Australians from regional, remote and very remote parts of Australia.

By way of example, the inappropriate sales conduct includes instances whereby Optus Sales Staff:

• subjected the Vulnerable Consumers to undue pressure or influence, inducing those consumers to purchase a large number of products and services that the consumers often did not want, did not need and/or could not afford;
• failed to explain the terms and conditions of the contracts for sale to the Vulnerable Consumers in a manner that those consumers could understand, with the result that the Vulnerable Consumers did not understand their ongoing payment obligations;
• sold Vulnerable Consumers products and services that they did not want or could not use, including instances where staff did not have regard to whether the Vulnerable Consumers had Optus coverage where they lived, and sold Vulnerable Consumers goods and services that they would not be able to use where they lived because of the lack of Optus coverage;
• sold the Vulnerable Consumers products and services Optus knew, or ought reasonably to have been aware, the Vulnerable Consumer could not afford following a credit check; and
• misled the Vulnerable Consumers to erroneously believe that particular products were “free” or included as part of a bundle at no additional cost.

In some cases, despite knowing about the inappropriate sales conduct and that the conduct was subject to ongoing internal and external investigations, Optus pursued debt collection activities in respect of the Vulnerable Consumers, including by referring and selling their debts to third party debt collection agencies.

In respect of one store (the Optus Mount Isa Store), Optus pursued debt collection activities in circumstances where Optus’s senior management knew that those debts related to contracts for products and services that had been or might have been created without the knowledge of the affected consumers. Optus’s senior management was aware that the majority of affected consumers were First Nations Australians from Mount Isa and the Northern Territory.

The inappropriate sales conduct took place in circumstances in which Optus’s senior management became increasingly aware, or ought to have become increasingly aware, that Optus Sales Staff were engaging in the inappropriate sales conduct, that its existing systems and controls were deficient to avoid or prevent that conduct, and that there were deficiencies in how Optus dealt with Vulnerable Consumers.

When the instances of inappropriate sales conduct were brought to the attention of those involved in Optus’s complaints handling functions and, in some cases, Optus’s senior management, Optus generally failed to fully remediate the conduct for long periods of time, sometimes not until the matters were referred to the Telecommunications Industry Ombudsman (TIO) for resolution. In addition, Optus failed to promptly take steps to fix the deficiencies in its systems, which allowed the conduct to continue to occur.

Optus and the ACCC have agreed to resolve the proceedings, and will make joint submissions in support of relief orders to be sought from the Court in connection with the proceedings, including declarations, penalties, costs, a publication order and corrective notice. 

As part of the resolution of the proceedings, Optus has offered this court enforceable undertaking to the ACCC, which provides for, among other things, consumer remediation, a $1 million donation to an organisation facilitating digital literacy of First Nations Australians, and changes to Optus’s processes, systems and remuneration structures designed to prevent further conduct from occurring.