The ACCC has just announced that the Federal Court has ordered Optus to pay $10 million for misleading customers. Proceedings against Optus began in October 2018, with the order being handed down today.
In a breach of corporate regulations, some Optus customers unknowingly bought digital content such as ringtones and games through third party billing services.
These inadvertent purchases occurred when customers were subscribed to Optus’ Direct Carrier Billing (DCB) service. The telco has admitted that it did not adequately inform its customers that this service was set to default on their accounts.
Optus subsequently earned commissions on any intentional or unintentional purchases that occured through DCB. The ISP also admitted that it was aware of customers being billed for these services, sometimes without their knowledge, from at least April 2014.
The ACCC has reported that despite receiving over 600,000 inquiries about its DCB service, it failed to put identity verification measures in place and even referred some complaints to third parties.
While DCB descriptions and purchases could be added to a customer bill through two browser clicks, customers reportedly had difficulty cancelling and getting refunds for these purchases from those third parties.
“In many cases, Optus customers had no idea they were buying anything, and certainly did not need or want the content for which they were being charged,” ACCC chair Rod Sims said.
“Optus failed to take appropriate action, choosing instead to continue to charge customers and collect commissions on these sales, even after numerous complaints.
“We are pleased that the Court agreed that this conduct is simply unacceptable, and deserves a significant penalty,” Mr Sims said.
So far Optus has refunded around $8 million to over 240,000 customers. Third party providers have also issued a further $13 million in refunds.
If this story sounds familiar, it’s because Telstra was fined the same amount in April 2018 for similar violations.