Need to know
- The ACCC is taking the telco giant to court for pressuring around 429 consumers into buying products and services they didn’t actually need or want
- Many were First Nations Australians from regional and remote areas or people from culturally and linguistically diverse backgrounds
- The allegations against Optus reflect a larger pattern in the telecommunications sector when it comes to aggressive sales tactics and credit assessments
It was the kind of bare-knuckled sales tactic you would normally associate with a very dodgy operator, except the business in question was Australia's second-largest telecommunications company – Optus.
The Australian Competition and Consumer Commission (ACCC) recently announced it was taking the telco giant to court for pressuring around 429 consumers into buying products and services they didn't actually need or want.
Many of those targeted by the sales blitz were living with a mental disability or had diminished cognitive capacity or learning difficulties. Many were financially dependent on others or unemployed and had limited financial and legal literacy.
And many were First Nations Australians from regional and remote areas or people from culturally and linguistically diverse backgrounds.
Then, when these customers couldn't make payments to Optus, the company called out the debt collectors – even in cases where the company knew the sales contracts were created fraudulently.
Optus sold goods to consumers experiencing vulnerability which they did not need, did not want and could not afford
ACCC chair Gina Cass-Gottlieb
How did all this happen? It seems Optus's commission-based remuneration scheme for sales staff went badly awry, but the conduct continued even after management became aware of it. And when customers couldn't pay, the company clawed the commissions back from its salespeople.
"This case concerns allegations of very serious conduct, as our case is that Optus sold goods to consumers experiencing vulnerability which they did not need, did not want and could not afford," says ACCC chair Gina Cass-Gottlieb.
Among other things, the alleged conduct involved salespeople pressuring these consumers into buying expensive phones and accessories without even bothering to check whether they had Optus coverage where they lived.
'Unconscionable and appalling'
Australian Communications Consumer Action Network (ACCAN) CEO Carol Bennett called the alleged behaviour "unconscionable and appalling".
"It is a sad day for the telco industry when profits come at the expense of supporting our most vulnerable, and sales incentives drive the exploitation of people who rely on these essential services for their wellbeing and quality of life," Bennett says, adding that the ACCC case "paints a sordid picture of alleged exploitative corporate conduct at its very worst. What is alleged simply cannot be allowed to occur in this country and requires decisive action from government".
ACCAN says the allegations against Optus reflect a larger pattern in the telecommunications sector when it comes to aggressive sales tactics and credit assessments.
In 2021, Telstra paid a record $50 million fine for inappropriately selling mobile phone plans to Indigenous Australians, leaving thousands of customers in serious debt.
It is a sad day for the telco industry when profits come at the expense of supporting our most vulnerable
ACCAN CEO Carol Bennett
As it stands, the telco sector is guided by voluntary industry codes rather than direct government regulation. ACCAN says it's clearly time for the government to step in.
The harm took many forms in the Optus case.
"Many consumers suffered financial harm, incurring thousands of dollars of debt and non-financial harm, such as shame, fear, and emotional distress about the debts or being pursued by debt collectors," Cass-Gottlieb says.
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