Optus Fined A$100 Million for “Appalling” Sales Tactics Targeting Vulnerable Customers
Telecommunications giant Optus, a subsidiary of Singapore government-owned Singtel, has been hit with a hefty 100 million Australian dollar ($66 million) fine by an Australian judge for “unconscionable conduct” in its sales practices. The Federal Court ruling on Wednesday, approving a plea agreement between Optus and the Australian Competition and Consumer Commission (ACCC), concludes a four-year period of aggressive and inappropriate sales targeting hundreds of vulnerable customers, including those in remote Indigenous communities.
The Court’s Scathing Judgment
Federal Court Justice Patrick O’Sullivan did not mince words, describing Optus’s actions as “extremely serious and can only be described as appalling.” He further stated that Optus’s conduct was “predatory,” emphasizing that “Optus senior management knew, or ought to have known, of the system failures that allowed the unconscionable conduct.”
The court highlighted that victims included individuals with mental disabilities, those facing financial hardship, people with low financial literacy, and customers with limited English proficiency or learning difficulties. Disturbingly, many of these customers lived in areas where Optus’s mobile network had no coverage, rendering the services they were sold entirely unusable.
Unethical Sales Practices Uncovered
The investigation revealed that Optus sales staff exerted undue pressure on these susceptible individuals. They were found to have fabricated customer details to secure higher credit approvals for service contracts. Once these contracts were in place, Optus then engaged debt collectors to pursue payments from customers who had often been misled or sold services they couldn’t use.
Optus’s Response and Remediation Efforts
Following the judgment, Optus released a statement asserting its commitment to “remediating impacted customers as a matter of priority.” While specific details of the remediation were not immediately disclosed, the company also pledged to pay an additional AU$1 million ($660,000) to support digital literacy initiatives aimed at Indigenous Australians. Optus CEO Stephen Rue, in June, admitted that these corporate law breaches were “inexcusable and unacceptable.”
A Challenging Period for Optus: Network Outage Fallout
This substantial fine comes at a particularly challenging time for Optus, which is simultaneously grappling with severe fallout from a widespread network outage that occurred on September 18. That incident prevented hundreds of emergency calls from connecting, a failure that has tragically been linked to four deaths. The Australian government has launched a separate inquiry into this outage, with Treasurer Jim Chalmers raising concerns about whether parent company Singtel is adequately funding Optus to ensure the reliability of its critical emergency call services.
Investment vs. Human Error Debate
Singtel chief executive Yuen Kuan Moon defended the parent company’s commitment, stating that AU$9.3 billion ($6.2 billion) has been invested in Optus over the past five years to bolster its network infrastructure across Australia. Moon affirmed that Singtel “will continue to invest as needed for Optus to provide reliable communication services to all Australians.” However, Optus CEO Stephen Rue attributes the recent emergency call failure not to a lack of investment but to “human error.” “It’s not expenditure, it’s process. The standard processes were not followed. That’s not an investment issue. That is people not following processes,” Rue told reporters.
The dual crises underscore significant operational and ethical challenges for Optus, testing public trust and drawing intense scrutiny from regulators and the Australian government.
