Optus has agreed to a $100 million penalty, pending court approval, for engaging in unconscionable conduct in the sale of telecommunications goods and services. It follows court action initiated by the Australian Competition and Consumer Commission (ACCC) against the telecommunications giant.

Optus has admitted to the conduct, which affected over 400 consumers across 16 different stores in Australia between August 2019 and July 2023. The inappropriate sales practices involved selling products to consumers who did not want, need, or could not afford them, while misleading them about the associated costs. Many of the affected consumers were vulnerable, including individuals with mental disabilities, limited financial literacy, or those for whom English was not their first language. First Nations Australians from regional and remote areas were particularly impacted by these practices.

“The conduct, which included selling inappropriate, unwanted or unaffordable mobiles and phone plans to people who are vulnerable or experiencing disadvantage is simply unacceptable,” said ACCC Deputy Chair Catriona Lowe. “During our investigation into this case, the ACCC heard many stories of the impact of this conduct on affected consumers.”

The ACCC’s investigation was prompted by a referral from the Telecommunications Industry Ombudsman and kicked off in October 2024. It found Optus’ senior management was aware of the inappropriate sales practices but did not address them promptly. Optus has acknowledged it failed to promptly take steps to fix deficiencies in its systems, which allowed the conduct to continue.

Commission-based sales arrangements were identified as a potential factor contributing to the inappropriate sales conduct. The ACCC noted this was despite the Telecommunications Consumer Protections Code requiring Optus, from 17 June 2022, to have regard best-practice recommendations, which recommend businesses avoid commission-based selling because of its potential to exacerbate the vulnerability of consumers.

“Many of these consumers who were vulnerable or experiencing disadvantage also experienced significant financial harm,” Lowe continued. “They accrued thousands of dollars of unexpected debt and some were pursued by debt collectors, in some instances for years. It is not surprising, and indeed could and should have been anticipated, that this conduct caused many of these people significant emotional distress and fear.”

Optus has signed an undertaking to compensate impacted consumers and improve its internal systems, pending court orders. The company has committed to a $1 million donation to an organisation facilitating digital literacy for First Nations Australians. Additionally, Optus will review its complaint handling processes, enhance staff training, change its debt collection systems, and alter its sales staff remuneration structure.

Optus has also begun the process of buying back 34 licensee stores located in the Northern Territory, Queensland, and South Australia.

“We are particularly concerned that Optus engaged debt collectors to pursue some of these consumers after it had launched internal investigations into the sales conduct,” Lowe stated.

The case against Optus follows a similar ACCC action against Telstra, which was fined $50 million in 2021 for unconscionable sales to Indigenous consumers. Optus is Australia’s second-largest telecommunications provider and is owned by Singtel Optus Pty Ltd. Its retail stores are either directly owned or operated through third-party licensees.

“Optus has admitted to this conduct and has appropriately committed to changing its systems. It has begun compensating affected consumers,” Lowe said. “We are grateful to the many advocates, financial counsellors and carers who assisted the impacted individuals. We also thank the Telecommunications Industry Ombudsman for their role in drawing these issues to our attention.”