Optus has been hit with a $10 million fine for misleading customers over digital content and in one of the highest penalties to be handed down by the Federal Court over a consumer matter.
After the consumer watchdog took action, the mobile firm admitted it misled consumers who unknowingly or mistakenly purchased games, ringtones and other content through a third-party billing service.
The Australian Competition and Consumer Commission said on Wednesday the penalty equalled that paid by Telstra last year for similar conduct and was amongst the highest to be handed down following ACCC action over a consumer matter.
“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.”
Optus admitted to not properly informing customers that the direct carrier billing service (DCB) – which they earned commissions on – was a default setting on their accounts.
The telco also acknowledged it knew from at least April 2014 that many customers were being billed for content they had unintentionally signed up for, and failed to implement measures to safeguard future customers.
Since 2012, Optus has earned about $65.8 million in commissions for products sold through the DCB service while customers were charged roughly $195 million for the content.
Singapore Telecom-owned Optus received more than 600,000 enquiries about the service but referred them onto third parties to deal with.
The ACCC understands about $8 million has been refunded to 240,000 customers already, while third-party providers have paid compensation to the tune of $13 million.
“We are pleased that the Court agreed that this conduct is simply unacceptable, and deserves a significant penalty,” Mr Sims said.