Telco giant Optus has been slapped with penalties worth $6.4 million, after the ACCC accused it of misleading thousands of customers about internet disconnections.
The ACCC said in a statement that Optus had emailed a total of 138,988 of its mobile customers on 24 May 2018, claiming that their home broadband services would soon be disconnected, and urged them to “make the switch, before it’s too late” to Optus NBN broadband.
The real kicker, according to the competition watchdog, was that these customers’ home internet services were not even provided by Optus, but rather its competitors.
“We took this case against Optus because we were concerned its emails created a false sense of urgency for consumers and may have discouraged them from shopping around for the best deal available,” ACCC chair Rod Sims said after the Federal Court determined the telco had misled or deceived its customers, who did not face immediate disconnection of their existing services.
“As the NBN rollout nears completion, consumers around Australia are making decisions about whether and when to move onto the NBN, and what services are best for them.
“The industry should be helping consumers during this process, not providing them with misleading information. We are continuing to watch this area closely.”
According to the ACCC, Optus has in excess of 1.1 million broadband customers in Australia, equating to a total market share of 30 per cent.
‘Email mistakenly sent’: Optus
Responding to the Federal Court ruling and the ACCC’s subsequent statement, Optus said that the offending material had been sent to the customers by mistake.
“Friday’s Federal Court proceedings and the orders handed down bring closure on an action originally brought by the ACCC in June 2019 regarding a marketing email mistakenly sent to customers in May 2018 about the disconnection of their broadband service,” the telco said in a brief statement issued to My Business.
“Optus co-operated with the ACCC throughout this process and we reaffirm our apology to customers who received the mistaken communication in 2018. We have already offered a costless exit for those customers who took up the offer.”
It concluded by stating, “Optus is committed to improving customer experience and customer service across our business, and we continue to devote energy and resources to deliver great service to all our customers.”
Second monster penalty in 2 years over NBN claims
Mr Sims expressed concern that this verdict marks the second time Optus has been hauled before the Federal Court in as many years.
“We are concerned about Optus’ recent track record in misleading consumers about the NBN. We expect that this $6.4 million penalty will serve as a warning to Optus and other telcos that they must not mislead consumers about their choices when the NBN is being rolled out,” he said.
In May last year, the court fined Optus $1.5 million over similar claims about NBN connections made to other customers between March 2015 and October 2017.
“Optus pressured customers by misrepresenting the time period in which services could be disconnected,” Mr Sims said at the time.
“Businesses should not make false representations which distort customers’ decision-making.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.