THE Australian Competition and Consumer Commission (ACCC) has filed court proceedings against subsidiary Optus mobile, said Singtel in a bourse announcement on Thursday (Oct 31).
The court proceedings, filed in the Federal Court of Australia, alleged that Optus mobile acted unconscionably in its dealings with about 429 customers. Optus is reviewing the matters raised and will respond to the claims.
According to ACCC’s press release, Optus had allegedly sold mobile phones and plans to vulnerable customers, which include those with diminished cognitive capacity and learning disability.
The case involves allegations that Optus had engaged in inappropriate sales conduct. This includes allegedly engaging debt collectors to pursue customers, despite knowing that their contracts were created fraudulently.
“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,” said Gina Cass-Gottlieb, ACCC chairperson.
Financial harm
Some of the alleged inappropriate sales practices include sales staff manipulating credit check results without consumers’ knowledge to sell mobile phones and plans they could not afford, as well as failing to explain the terms and conditions in an understandable manner.
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Despite knowing this alleged conduct, Optus had pursued debt collection, and referred and sold consumers’ debt to third party debt collection agencies.
“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,” said Cass-Gottlieb.
The ACCC is pursuing penalties, consumer redress, a compliance programme and costs from Optus.
The company has said that it is unable to determine the quantum of penalties, if any. Should an infringement be found, the court will determine the penalty amount based on a number of factors.
Optus interim CEO Michael Venter has apologised to the customers affected by the misconduct and the distress caused. In a media statement, Venter said that the company is addressing the impacted customers through means such as providing refunds, waiving outstanding debts and allowing them to keep their mobile phones.
‘We have taken disciplinary action (including terminations) against staff whom we determined were responsible for this misconduct involving vulnerable customers,” said Venter.
