Optus has been hit with a record $100 million penalty after the Federal Court found the telco engaged in “predatory” and “appalling” sales practices that targeted hundreds of vulnerable Australians over a four-year period.
The judgment comes as the company reels from its second Triple Zero outage in recent years, and subsequent revelations that four people may have died during that blackout.
“The conduct varied in form but consistently reflected predatory sales practices that exploited consumer vulnerability,” noted Justice Patrick O’Sullivan in the judgement passed on Sept. 24.
The case was brought by the Australian Competition and Consumer Commission (ACCC), which accused Optus of exploiting 400 customers between 2019 and 2023. Many of those affected were Indigenous Australians in remote communities, as well as people living with disabilities, limited financial literacy, or unemployment.
Justice O’Sullivan said Optus had subjected these customers to “undue pressure” to buy products and services they neither needed nor could afford.
In many cases, the company’s staff failed to explain contracts in plain language, leaving customers unaware of their ongoing obligations.
He noted that the telco’s actions were especially egregious given the vulnerable position of those targeted.
Some customers were pursued by debt collectors even though Optus “knew, or ought to have known” that the debts stemmed from improper sales practices. Others had defaults listed against their names, worsening their financial circumstances.
The judgment further noted that some of the conduct took place when senior Optus executives—including the CEO and multiple vice presidents across retail, operations, risk, regulatory and customer divisions—knew, or should have known, about system failures within the company.
The court found 24 separate breaches of consumer law.
In the northern town of Mount Isa alone, 82 fraudulent contracts were identified, while in Darwin, staff were found to have bypassed credit checks to push sales between June 2021 and July 2023.
Optus Accepts Responsibility
Optus admitted liability during proceedings and agreed to the penalty.The company was also ordered to publish corrective notices, cover the ACCC’s legal costs, and has entered into an enforceable undertaking that includes a $1 million donation to support digital literacy programs for Indigenous Australians.
Responding to the ruling, Optus CEO Stephen Rue acknowledged the damage caused.
“The behaviour was totally and utterly unacceptable,” he said. “One of the very first things I did when I became CEO was initiate a whole-of-company review of sales processes and incentive schemes.”
Rue said some franchise stores had been taken back under Optus management to improve oversight.
ACCC Welcomes Record Penalty
The $100 million fine is one of the largest ever imposed in Australia for breaches of consumer law.ACCC chair Gina Cass-Gottlieb said the outcome sent a clear message.
“This penalty reflects the seriousness of Optus’s conduct. Exploiting vulnerable people for profit is not only unlawful but utterly unacceptable.”
She said the case highlighted the importance of holding large corporations to account when they breach community trust.
The ruling piles fresh pressure on the telco, which is already under investigation over a Triple Zero outage on Sept. 18 that left hundreds of emergency calls unanswered, with four people dying during the disruption.
An independent review into that incident, led by Dr Kerry Schott, is now underway.
