Telstra has admitted to unconscionable conduct during its sales of mobile phone plans to Indigenous consumers and could face a penalty of up to $50 million.
The telco admitted it had breached Australian consumer law and on Thursday the Australian Competition and Consumer Commission announced it was instituting Federal Court proceedings against the company.
Thursday’s announcement comes after an 18-month investigation by the ACCC, after serious concerns were raised by financial counsellors in rural and remote areas.
In 2019, financial counsellors told the ABC consumers were being sold unaffordable phone plans and were then aggressively pursued by debt collectors.
“Telstra has admitted it breached Australian Consumer Law and acted unconscionably when sales staff at five licensed Telstra-branded stores signed up 108 Indigenous consumers to multiple post-paid mobile contracts which they did not understand and could not afford between January 2016 to August 2018,” the ACCC said.
The ACCC said Telstra had agreed to consent orders that would support a penalty totalling $50 million, but ultimately, it will be up to the court to decide how much Telstra should pay.
“This case exposes extremely serious conduct which exploited social, language, literacy and cultural vulnerabilities of these Indigenous consumers,” ACCC chair Rod Sims said.
“Even though Telstra became increasingly aware of elements of the improper practices by sales staff at Telstra licensed stores over time, it failed to act quickly enough to stop it.
“These practices continued and caused further, serious and avoidable financial hardship to Indigenous consumers.”
-more to come
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