Optus penalised $10m for misleading customers
Optus has been ordered by the Federal Court to pay a $10 million penalty for its treatment of customers who unknowingly purchased games, ringtones and other digital content through its third-party billing service.
The move follows action taken against the company by the ACCC.
Optus admitted that it misled consumers and breached the ASIC Act when it billed customers for third party-produced content which they mistakenly bought or subscribed to through its “direct carrier billing” (DCB) service.
Optus also did not properly inform customers that the DCB service was a default setting on their accounts, and that they would be billed directly by Optus for any content bought through the service, even unintentionally.
Optus further admitted that it knew from at least April 2014 that many customers were being billed for DCB content they had mistakenly or unknowingly signed up for.
The DCB service allowed a purchase or subscription to be confirmed and charged to a customer’s bill after just one or two clicks on a web browser. Optus earned commissions on items sold through the service.
Despite receiving over 600,000 enquiries about the service, Optus failed to put in place appropriate identity verification safeguards, and referred customers who sought to query DCB service charges to third parties.
Many customers then encountered significant difficulties in cancelling the purchases and obtaining refunds from the 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,” Sims said.
About 240,000 customers have so far been refunded. The ACCC said it understands Optus has paid about $8 million in refunds and third-party providers another $13 million.
Optus has committed to contacting potentially impacted customers who complained about the services and have not already received a refund, as well as those customers who Optus identifies as having been incorrectly charged.
The company will also deal with any future complaints in good faith.
The ACCC has encouraged customers to check their Optus mobile account, and if they believe unauthorised charges have been applied under the DCB service, they should contact Optus on 13 39 37.
The $10 million penalty is one of the highest imposed by the Court after ACCC action on a consumer matter and equals the penalty paid by Telstra last year after it admitted to similar conduct.
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