Optus has been ordered to pay a $100 million fine over “appalling” sales conduct with hundreds of vulnerable customers for several years until 2023.

The company is being fined as it deals with its second triple-0 outage crisis in several years.

Optus had already agreed to pay the fine with the Australian Competition and Consumer Commission (ACCC), which brought the case against Australia’s second biggest telco. 

Optus faces $100m penalty for unconscionable conduct

Optus admits to engaging in unconscionable conduct and agrees to a $100 million penalty for selling customers phones and contracts they did not want or need.

In enforcing the fine today, the Federal Court’s Justice Patrick O’Sullivan described the company’s conduct as “extremely serious” and “appalling”.

“Many of the effected consumers were first nations Australians and were vulnerable,” he noted.

He added that the customers were people with mental disabilities, people suffering from financial hardship, those with low financial literacy, and people with limited English proficiency and/or learning difficulties.

And many of them are from regional, remote, and very remote parts of Australia.

Justice O’Sullivan said “inappropriate sales practices” occurred across 16 stores in South Australia, Queensland, the Northern Territory, Victoria, Western Australia and Tasmania, between August 2019 and July 2023.

He noted that Optus’s conduct comprised three categories of unconscionable conduct, including inappropriate debt collection practices, misleading or deceptive conduct, and systemic failure to explain the terms and conditions of contracts and to conduct coverage checks.

In some cases, people were sold plans even though they lived in areas where Optus reception was unavailable.

Optus previously admitted that its sales staff acted unconscionably when selling products and services to more than 400 consumers for that period.

“Optus senior management knew or ought to have known of the system failures that allowed the unconscionable conduct, which may rightly be described as predatory, to occur, yet failed to act with any sense of urgency,” Justice O’Sullivan said.

“In failing to act notwithstanding knowledge, senior management abrogated their management responsibilities and consequently Optus abrogated any semblance of responsible corporate behaviour.”

Optus boss Stephen Rue said on Wednesday in a press conference before the Federal Court’s decision that the behaviour was “totally and utterly unacceptable”.

“One of the very first things that I did was set up a whole-of-company review,” he said.

“We looked at our sales processes. We were looking at incentive schemes. We have brought back some of the franchise stores that were involved.”

The case was brought by the ACCC after financial counsellors tipped them off. 

Financial Counselling Australia’s director of First Nations policy, Lynda Edwards, said a $100 million fine was “not a lot of money” to big companies like Optus.

Lynda stands with a microphone. She has a lanyard around her neck

Lynda Edwards says the telcos are given free reign. (Supplied: Financial Counselling Australia)

“What is it going to take for these companies to actually look after vulnerable people in our communities?” she asked.

“You know, our telcos in Australia, they’re given free rein on how they self-regulate their business.”

A former ACCC chair said the Optus license should be looked at closely.

“Three huge failures,” Professor Allan Fels told the ABC.

“Two with the triple-0. Now one huge one with the consumer front. There is something wrong with the company.”

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