Telstra has copped a multi-million dollar penalty for targeting vulnerable Indigenous customers with mobile phone plans they did not understand and could not afford.
The Federal Court today ordered the telco pay $50 million in penalties for engaging in “unconscionable conduct”.
According to the Australian Competition and Consumer Commission, sales staff at five Telstra-branded stores signed up 108 Indigenous consumers to multiple post-paid mobile contracts, despite having limited financial and literacy skills to understand the terms.
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“Sales staff in these Telstra-branded stores used unconscionable practices to sell products to dozens of Indigenous customers who, in many cases, spoke English as a second or third language,” ACCC Chair Rod Sims said.
“This conduct included manipulating credit assessments and misrepresenting products as free, and exploiting the social, language, literacy and cultural vulnerabilities of these Indigenous customers.”
The consumer watchdog said Telstra’s board and senior executives “failed to act quickly enough to stop these illegal practices when they were later alerted to them”.
The $50 million penalty imposed against Telstra is the second highest penalty ever imposed under the Australian Consumer Law.
“This is appropriate given the nature of the behaviour by Australia’s biggest telecommunications company, which was truly beyond conscience,” Mr Sims said.
Telstra has since taken steps to waive the debts, refund money paid and put in place measures to reduce the risk of similar conduct in the future.