MELBOURNE, Australia (AP) On Wednesday, an Australian judge imposed a significant fine of 100 million Australian dollars (approximately $66 million) on telecommunications giant Optus for engaging in unconscionable conduct. This ruling followed revelations that the company had sold services to hundreds of vulnerable customers, including individuals in Indigenous communities residing outside its coverage range.
Optus, which operates as a subsidiary of Singapore's government-owned Singtel, is additionally grappling with separate multimillion-dollar fines linked to its failure to connect hundreds of emergency calls during a recent outage, which has been associated with four fatalities. This incident emphasizes the operational failures within the company that have immediate and potentially devastating consequences for its users.
Federal Court Justice Patrick O'Sullivan upheld a plea agreement reached between Optus, Australia's second-largest telecommunications provider, and the Australian Competition and Consumer Commission (ACCC). This agreement pertains to inappropriate sales practices and unconscionable conduct that occurred over a four-year period leading up to July 2023. Justice O'Sullivan characterized Optus's conduct as “extremely serious” and “appalling,” highlighting the company’s senior management’s awareness, or should-have-been awareness, of the systemic failures that facilitated such actions, which he described as predatory.
The judge particularly noted that Optus’s conduct disproportionately affected vulnerable consumers, including those with mental disabilities, individuals experiencing financial hardship, customers with low financial literacy, and people facing language barriers or learning difficulties. A significant number of the affected customers were Indigenous individuals from regional and remote areas, some of whom resided beyond the reach of Optus’s mobile service coverage.
Sales staff at Optus reportedly applied undue pressure on customers, engaged in the fabrication of customer details to ensure higher credit approvals for contracts, and subsequently involved debt collectors to retrieve funds owed by these vulnerable clients. In reaction to the ruling, Optus issued a statement asserting its commitment to “remediating impacted customers as a matter of priority,” though it failed to provide specific details regarding the remediation process.
As part of its commitment to improve its practices, Optus has agreed to contribute AU$1 million (approximately $660,000) to support digital literacy initiatives aimed at assisting Indigenous Australians. When Optus publicly acknowledged its breaches of corporate law in June, Chief Executive Stephen Rue described these actions as “inexcusable and unacceptable.”
This critical ruling comes shortly after Optus appointed an expert to review a significant outage that occurred on September 18, which affected 631 customers attempting to contact emergency services. Tragically, four of those emergencies resulted in fatalities. Following this incident, Australian Treasurer Jim Chalmers announced that a government inquiry would investigate whether Singtel was providing sufficient financial support to enable Optus to ensure reliable emergency communication services.
Singtel's Chief Executive Yuen Kuan Moon indicated that the parent company has invested AU$9.3 billion (around $6.2 billion) in Optus over the past five years to enhance network infrastructure throughout Australia. Moon reaffirmed that Singtel “will continue to invest as needed for Optus to provide reliable communication services to all Australians.”
In addressing the root cause of the recent outage, Rue stated that the investigation had already established that it was a result of “human error.” He emphasized that the issue was not one of financial expenditure but rather a failure to follow established processes, indicating a need for improved operational adherence within the organization.
