The Federal Court has heard how people across Australia who were homeless, unemployed or on a disability pension were sold products and services they could not afford or need by Optus staff.
The details were outlined in a hearing presided by Justice Patrick O’Sullivan in Adelaide on Tuesday.
Justice O’Sullivan will decide if a $100 million fine previously agreed on by Optus and the Australian Competition and Corruption Commission (ACCC) will go ahead.
The proposed figure was agreed by the two parties after the ACCC investigated the Singaporean-owned company for unconscionable conduct between 2019 and 2023.
Optus admitted to engaging in unconscionable conduct. (ABC News: Christopher Gillette)
The legal action is also expected to determine orders of compensation for hundreds of vulnerable and disadvantaged customers nationally.
In a statement of agreed facts, ACCC senior counsel Thomas Duggan KC referenced 24 customers as examples, including a woman referred to as “consumer five”, who was sold seven contracts at two Optus stores in South Australia.
“Consumer five is a person living with an intellectual disability,” he said.
“[She had] a limited understanding of money and written documents, low vocabulary and literacy.”
He told the court consumer five was receiving a disability pension and sometimes engaged in casual work.
He said staff “input false information on credit checks”, resulting in “credit check failure”.
The woman’s parents complained to Optus in 2021 but were told by telco staff “there was nothing they could do” and their daughter “had to pay her bills”.
The debts amassed more than $6,000 and were later cleared.
“Every one of these examples has different situations, but Optus now accepts the conduct in relation to consumer five was unconscionable and we say, obviously so,” Mr Duggan said.
‘Resistance’ over complaint
The ACCC also revealed details about “consumer seven”, a man who Mr Duggan described as “homeless, lived with deafness, was mute and had parts of his fingers and hand amputated”.
The man, who recently passed away, had limited use of technology and was living on a disability payment.
Mr Duggan told the court staff at Optus’s Marion Store in South Australia sold the man two phones, three phone plans and two accessory bundles, with a total full-term contract amounting to $7,542.
“At no point before signing did Optus staff explain the terms in a manner [he] would be capable of understanding,” he said.
The man’s support coordinator complained, only to be told by the telco that it could not progress the complaint without power of attorney.
‘Pattern of behaviours’
The court heard incidents at Optus’s Darwin stores constituted a “pattern of behaviours” whereby staff taught or directed junior employees to engage in inappropriate selling conduct.
Mr Duggan said an initial internal review by Optus revealed 17 staff sold phones and services to at least 70 customers who did not have Optus coverage at their home address.
As of February 2024, Mr Duggan said there were 564 customers who had since been deemed to have been impacted or potentially impacted by the misconduct.
Mr Duggan said many customers were First Nations consumers from remote communities across the Northern Territory.
“Optus had the knowledge of credit check failures, sale of accessory, false ABN, debt collection activity, existence of vulnerable consumers and coverage checks,” he said
“We regard the conduct in relation to Darwin as the most serious.”
Mount Isa investigation
The ACCC detailed similar conduct by Optus staff at its Mount Isa store in Queensland in 2019.
The watchdog’s junior counsel, Timothy Goodwin, said staff fraudulently completed 82 contracts with 42 customers without consumer knowledge.
“In February 2020, Optus commenced debt collector activity against 42 consumers … [and] referred outstanding debt to third-party debt collection agencies,” Mr Goodwin said.
One of those consumers received more than 100 calls from a third-party debt collector, while another was negatively impacted when trying to purchase a car, the court heard.
Optus apologises
Optus representatives also spoke in court about the incidents.
Optus senior counsel Steven Finch said the telco had taken extensive remediation steps, including repayments to customers and voluntary payments made without legal obligations.
“Optus sincerely apologises to all customers,” Mr Finch said.
“It should’ve acted more quickly when this conduct occurred.”
Mr Finch said the telecommunication company would donate $1 million to an organisation that supported the digital literacy of First Nations Australians.
The matter was presided over by Federal Court Justice Patrick O’Sullivan. (Supplied: Federal Court of Australia)
In determining the proposed $100m penalty, Justice O’Sullivan said “great weight should be given to the parties agreed range”.
The hearing has been adjourned until a later date.
