Optus Mobile, part of Singtel's Australia subsidiary Optus, has been taken to court by a local authority, as part of a list of woes that had taken place Down Under in recent years including cybersecurity incidents.
On Oct 31, the Australian Competition and Consumer Commission (ACCC) filed proceedings in the Federal Court of Australia alleging that Optus Mobile "acted unconscionably" when dealing with 429 consumers.
While Optus did not disclose further related details in its announcement of the proceedings, ACCC on its website indicated that Optus sold telecommunications goods and services to these consumers "that they often did not want or need, and in some cases then pursuing consumers for debts resulting from these sales."
According to the ACCC, many of these consumers were experiencing vulnerability and, or disadvantage, such as living with a mental disability, diminished cognitive capacity or learning difficulties. They are also financially dependent or unemployed, or have limited financial and legal literacy.
"Many of the impacted consumers were First Nations Australians from regional and remote areas or people from culturally and linguistically diverse backgrounds," says ACCC. First Nations Australians broadly refers to Aboriginals and Torres Strait Islander peoples.
ACCC chair Gina Cass-Gottlieb alleges that Optus' practices were incentivised by the commission-based remuneration for sales staff.
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"In some cases, we allege Optus took steps to protect its own financial interests by clawing back commissions to sales staff but failed to remediate affected consumers,” she adds.
"Optus is reviewing and considering the matters raised in the proceedings and will respond to the claims made by the ACCC in due course," the company says.
Optus adds that it is for now unable to determine the quantum of penalties to be paid, if any, that could arise, and that any question regarding penalties is ultimately a matter for the Federal Court to determine.
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"If a contravention is found, the Court will consider a number of factors and apply a penalty amount it determines overall as appropriate based on the events that occurred," says Optus.
Singtel shares closed at $3.13 on Oct 30.
