Optus Hit With $65 Million Penalty for Exploitative Sales Practices

Key Takeaways

• Record Penalty: Optus has been ordered to pay $65 million (AUD 100 million) for unconscionable sales practices targeting vulnerable consumers.
• Vulnerable Communities: Hundreds of Australians, including First Nations people in remote areas and individuals with disabilities, were left in debt from unwanted or unaffordable contracts.
• Court’s Message: Justice O’Sullivan described the consequences as “profound,” highlighting the severe financial and emotional harm.
• Remediation Program: Optus agreed to a five-year undertaking, including compensation, systemic reforms, and a $650,000 (AUD 1 million) donation to improve digital literacy for First Nations Australians.
• Industry Pattern: The case mirrors a 2021 action against Telstra, which was fined $33 million (AUD 50 million) for similar conduct.

Deep Dive

Optus has been dealt a major blow in the Federal Court, ordered to pay $65 million (AUD 100 million) after admitting it engaged in unconscionable conduct by selling mobile phones and plans to vulnerable Australians who often could not afford, use, or understand them.

The penalty follows an ACCC investigation that uncovered misconduct at 16 Optus stores between 2019 and 2023. Staff pressured consumers into signing contracts for multiple devices, plans, and accessories they did not need. Some victims were then pursued for thousands of dollars in debts, even when Optus knew the sales practices were inappropriate or fraudulent.

The affected group included people with disabilities, individuals with limited English skills, and many First Nations Australians in regional and remote communities. According to ACCC Deputy Chair Catriona Lowe, the harm went well beyond financial losses. “We heard from many people who had not only experienced significant financial harm, but also emotional distress and fear after being pursued by debt collectors for long periods,” she said.

Justice O’Sullivan echoed those concerns in his ruling, noting that the misconduct inflicted “severe financial harm, emotional distress, and social shame,” and in some cases, risked cutting people off from essential telecommunications services altogether.

The case laid bare failings inside Optus’s own systems. Internal investigations had revealed misconduct at its Mount Isa store as early as 2019, where staff falsified documents and used the identities of First Nations consumers without their knowledge to create contracts. Despite senior management being aware of the misconduct, debts tied to these contracts were still sold on to collection agencies, with some consumers chased as late as 2024.

Commission-based sales incentives were also found to have encouraged the harmful practices, despite industry codes warning against such models.

As part of a five-year enforceable undertaking with the ACCC, Optus will compensate affected consumers, overhaul its complaints-handling processes, restructure sales incentives, and ensure certain regional stores are directly managed by the company. The telco also committed to a three-year remediation program and a $650,000 (AUD1 million) donation to boost digital literacy among First Nations Australians.

This isn’t the first time Australia’s telecom giants have faced accountability for exploiting vulnerable consumers. In 2021, Telstra was fined $33 million (AUD 50 million) for similar misconduct targeting First Nations Australians.

The ACCC said it welcomed Optus’s cooperation in resolving the proceedings, but stressed the case demonstrates the need for large companies to have robust safeguards against exploitative sales practices.

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