The Australian Competition and Consumer Commission (ACCC) has launched legal action against Optus, alleging that the telecommunications giant engaged in “unconscionable conduct” under the Australian Consumer Law. The ACCC claims that Optus exploited vulnerable consumers by pushing them into unwanted or unaffordable purchases and later pursuing these individuals for related debts.
The affected individuals reportedly included those living with mental disabilities, diminished cognitive capacities, or learning difficulties. Many were also financially dependent, unemployed, or had limited financial literacy, with a large proportion being First Nations Australians from regional and remote communities.
In one instance, a person living with an intellectual disability—which was reportedly evident to Optus staff—that impacts their ability to speak and understand financial matters allegedly went into an Optus store and was sold an expensive phone, a business phone contract under a false ABN, a new NBN internet plan and accessories, though their disability was evident to Optus staff. The person did not want or need the majority of these items and was reportedly upset and embarrassed about the unwanted and expensive items they were sold. When the person’s representative went to the store to return the items, the Optus staff allegedly refused to cancel the contracts, and it was only through the intervention of a financial counsellor that Optus cancelled the contracts.
The statement details multiple ways Optus allegedly took advantage of consumers. Sales tactics allegedly included undue pressure to buy products, misleading claims about costs (e.g., asserting certain items were “free”), and failure to inform consumers about key contract terms. In numerous cases, Optus did not verify if the products would be usable in the buyer’s location due to coverage limitations, resulting in many consumers purchasing items they could not effectively use.
The ACCC alleges that Optus’ commission-based remuneration for sales staff created incentives for aggressive sales tactics. Staff were allegedly encouraged to sell high-cost items, such as phones and accessories, regardless of whether the products met the consumers’ needs or financial capacities. The ACCC claims this approach was especially harmful in stores in Darwin and Mount Isa, where sales staff, with encouragement from management, engaged in conduct that disproportionately affected consumers in vulnerable situations.
In the two Darwin stores, it is alleged that inappropriate sales practices occurred over two years, targeting 363 consumers, many of whom were First Nations Australians. Staff allegedly engaged in tactics such as manipulating credit checks, overselling products and failing to conduct necessary coverage checks. The Mount Isa store reportedly saw similar conduct, with 42 consumers impacted by contracts created fraudulently by a staff member, unbeknownst to the consumers.
The complaint also claims that when Optus became aware of these issues, senior management failed to implement necessary changes to protect affected consumers. While Optus sometimes clawed back commissions from sales staff involved in these questionable practices, they did not prioritise consumer remediation, leaving vulnerable customers with mounting debts. In some cases, Optus referred or sold debts to third-party agencies, compounding the emotional and financial burden on consumers.
The ACCC claims that the consequences of Optus’ alleged conduct extended beyond financial harm. Many consumers faced thousands of dollars in debt and endured emotional distress due to relentless debt collection activities. Some affected consumers needed support from financial counsellors, carers, and advocates, who helped them navigate Optus’ systems and achieve partial resolution.
The ACCC has requested a range of legal remedies, including declarations, penalties, and orders for consumer redress. Additionally, it seeks the implementation of a compliance program to prevent future misconduct and publication orders to inform the public about the case’s findings.
According to ACCC Chair Gina Cass-Gottlieb, Optus’s alleged actions represent a severe breach of consumer trust. The ACCC argues that the company’s prioritisation of financial gain over ethical sales practices and consumer welfare highlights the need for rigorous enforcement of the Australian Consumer Law, especially when it involves vulnerable populations.
“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,” she said. “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”.
“We are taking this action against Optus and seeking consumer redress in relation to the hundreds of consumers affected by this alleged unconscionable conduct,” Cass-Gottlieb said.
“We will take appropriate enforcement action against breaches of the Australian Consumer Law, and we pay particular attention to conduct that disproportionately impacts consumers who are experiencing vulnerability or disadvantage”.
A spokesperson for Optus told B&T: “Optus acknowledges the ACCC’s media release. We are currently reviewing the claims made by the ACCC and will respond in more detail in due course”.
