‘Unconscionable conduct’: Optus’s $100m penalty sends a powerful warning to big business about how they treat customers

The largest telecommunications penalty in Australian history is currently before the Federal Court, and the details are both shocking and sobering.

As Justice Patrick O'Sullivan deliberates whether to approve Optus's agreed $100 million penalty for breaching the Australian Consumer Law, the case reveals a disturbing pattern of exploitation that should concern every Australian—particularly those who might be more vulnerable to high-pressure sales tactics.

This isn't just another corporate fine making headlines. It's a stark reminder that some of Australia's biggest companies have been systematically targeting our most vulnerable community members, and the practices exposed could affect any of us or our loved ones.

The Staggering Scale of Exploitation

The numbers alone tell a troubling story. Between August 2019 and July 2023, Optus sales staff at 16 retail stores pressured over 400 consumers into purchasing telecommunications products and services they did not want, need or could afford.

But this case becomes even more significant when compared to a similar scandal that rocked the industry just four years earlier.

This case follows similar ACCC action against Telstra, which was ordered in May 2021 to pay a $50 million penalty for engaging in unconscionable conduct involving 108 Indigenous consumers.

The Optus penalty—if approved—would be exactly double Telstra's record-breaking fine, reflecting both the increased scale of harm and the justice system's growing impatience with corporate misconduct.

The ABC reported that Justice O'Sullivan presided over the Adelaide hearing and said 'great weight should be given to the parties agreed range' in determining the $100m penalty. The hearing has been adjourned until a later date.

Who Were the Targets?

The victims weren't chosen randomly. Court documents reveal a systematic pattern of targeting people who staff knew would struggle to understand contracts or defend themselves.

Many of the affected consumers were vulnerable or experiencing disadvantage, such as living with a mental disability, or English not being a first language. Many of the consumers were First Nations Australians from regional, remote and very remote parts of Australia.

The Federal Court heard that people across Australia who were homeless, unemployed or on a disability pension were also sold products they could not afford or need.

The case studies presented to the Federal Court are heartbreaking. One woman with an intellectual disability was sold seven separate contracts despite having limited understanding of money and written documents.

Staff input false information on credit checks, and when her parents complained in 2021, they were told by Optus staff that 'there was nothing they could do' and their daughter 'had to pay her bills'.

The ABC transcript noted this woman amassed more than $6,000 in debts, which were later cleared. Counsel told the court: 'Optus now accepts the conduct in relation to consumer five was unconscionable and we say, obviously so.'

Another victim was a man who was deaf, mute, and had parts of his fingers and hand amputated.

Despite his obvious communication challenges and reliance on disability payments, staff sold him multiple phones, plans, and accessories totalling over $7,500 in contracts he couldn't possibly understand or use effectively.

The Unconscionable Methods

The sales tactics revealed in court documents should alarm anyone who's ever walked into a phone shop or taken a call from a telecommunications company.

Commission-based sales arrangements for Optus's sales staff had the potential to incentivise the inappropriate sales conduct, creating a system where vulnerable consumers became targets for financial gain.

The methods included:

• Pressuring customers into buying multiple products they didn't need
• Failing to explain relevant terms and conditions to vulnerable consumers in a manner they could understand
• Selling products to people in areas with no Optus coverage
• Misleading consumers to believe that goods were free or included as part of a bundle at no additional cost
• Manipulating credit assessments to approve customers who should have been declined

In Mount Isa, Queensland, the situation was even worse. The ACCC revealed that staff fraudulently completed 82 contracts with 42 customers without consumer knowledge, then pursued them for debt collection when they couldn't pay for services they never agreed to purchase.

Counsel said: 'In February 2020, Optus commenced debt collector activity against 42 consumers … [and] referred outstanding debt to third-party debt collection agencies. One of those consumers received more than 100 calls from a third-party debt collector.'

The Human Cost

The financial damage was devastating. One consumer accumulated a debt of over $19,000, while others faced years of harassment from debt collectors. Many consumers experienced significant financial harm, accruing thousands of dollars of unexpected debt and being pursued by debt collectors, in some instances for years, causing significant emotional distress and fear.

Perhaps most disturbing, Optus engaged debt collectors to pursue some of these consumers after it had launched internal investigations into the sales conduct, meaning the company continued to chase vulnerable people for debts it knew were questionable.

A Pattern Across the Industry

This isn't an isolated case of a few rogue employees. The pattern is troubling when you consider both major cases:

Telstra (2016-2018): 108 Indigenous consumers who did not speak English as a first language, had difficulties with literacy and financial concepts, and/or were unemployed and relied on government benefits

Optus (2019-2023): Over 400 consumers across 16 retail stores, with similar targeting of vulnerable communities

The timeline is particularly concerning—Optus's misconduct began in 2019, just as the Telstra investigation was reaching its peak. This suggests the industry didn't learn from Telstra's mistakes but instead continued similar practices.

Financial Counselling Australia noted that the penalty sends a strong message to the telecommunications industry that mis-selling to vulnerable customers will not be tolerated, and that financial counsellors have been raising concerns about Optus' conduct for years.

Your Rights and Protections

While these cases are disturbing, it's important to know that you do have rights and protections. The Australian Consumer Law provides several safeguards that apply to all telecommunications purchases:

Consumers automatically receive consumer guarantees when they buy goods and services, and it is unlawful for businesses to mislead consumers about these rights.

Under the Telecommunications Consumer Protections Code

Under the 2012 Telecommunications Consumer Protections (TCP) Code and Australian Consumer Law (ACL), consumers have a bunch of rights, including:

• The right to clear, accurate information about products and services
• Protection from high-pressure sales tactics
• The right to cancel contracts in certain circumstances
• The ability to cancel your contract early without penalty under certain circumstances
• Protection from unconscionable conduct

What You Can Do If You've Been Affected

If you believe you or a family member has been the victim of unconscionable sales practices:

1. Contact the Company First: Impacted consumers can call an Optus specialist customer care team on 1300 082 820 for further information or support

2. Document Everything: Keep records of all contracts, bills, and communications

3. Seek Help: Contact:

• The Telecommunications Industry Ombudsman: 1800 062 058
• ACCC Consumer Rights hotline: 1300 302 502
• Financial Counselling Australia: 1800 007 007

4. Know Your Rights: You have the right to have your complaint resolved in a fair, efficient and courteous manner and at no cost

Stronger Protections on the Horizon

The good news is that regulators are taking action. In February 2024, the ACMA made the Telecommunications (Financial Hardship) Industry Standard 2024, which commenced on 29 March 2024 and was developed to improve safeguards for telco customers having financial difficulties.

The planned Telecommunications Amendment (Enhancing Consumer Safeguards) Bill 2025 will further strengthen consumer and data protections, with fines for breaching industry codes, standards, and determinations increasing from $250,000 to around $10 million or 30 per cent of turnover.

These changes represent a significant escalation in the regulatory response to telecommunications misconduct, moving from voluntary industry codes to mandatory standards with substantial penalties.

Protecting Yourself and Your Family

The best defence against unconscionable sales practices is knowledge and preparation. Here are practical steps to protect yourself:

Before You Shop

• Research plans online before visiting stores
• Bring a trusted friend or family member for support
• Set a clear budget and stick to it
• Understand your current usage patterns

During Sales Interactions

• Never let anyone pressure you into signing immediately
• Ask for all offers in writing
• Request the Critical Information Summary (CIS) for any plan
• Verify coverage at your address before committing
• Walk away if you feel pressured or confused

After Signing

• Read your first bill carefully
• Monitor your usage and charges
• Contact your provider immediately if anything seems wrong
• Keep all documentation

The Broader Message

The penalty sends a strong message to the telecommunications industry: mis-selling to vulnerable customers will not be tolerated. But the real test will be whether this record-breaking fine actually changes industry culture or simply becomes another cost of doing business.

Financial Counselling Australia argues that self-regulation via the current Telecommunications Consumer Protections Code is clearly not working, and that rules need to be tightened, oversight improved, and enforcement strengthened to ensure that all consumers are properly protected.

The cases also highlight the crucial role that community advocates, financial counsellors, and consumer protection agencies play in holding big corporations accountable. The ACCC acknowledged being 'grateful to the many advocates, financial counsellors and carers who assisted the impacted individuals'.

Moving Forward Together

As Justice O'Sullivan considers whether to approve this historic penalty, it's worth remembering that behind every statistic is a real person who was taken advantage of when they were vulnerable. The woman with intellectual disability who accumulated $6,000 in debt. The deaf man who couldn't understand what he was signing. The remote community members who were sold phones that couldn't work where they lived.

This case isn't just about corporate accountability—it's about protecting the fundamental right to be treated fairly in the marketplace, regardless of your circumstances, background, or level of understanding.

The telecommunications industry provides essential services that connect us to family, friends, emergency services, and the broader world. We shouldn't have to navigate a minefield of predatory practices to access these vital services.

While we wait for Justice O'Sullivan's decision and for stronger regulatory reforms to take effect, the best protection we have is awareness, vigilance, and looking out for each other. If you see a family member or neighbour struggling with telecommunications issues, consider offering to help them understand their options or accompany them to resolve problems.