Australia's Telstra to pay $37m fine over sales to indigenous people

28 Novembre, 2020, 05:51 | Auteur: Auguste Feret
  • Telstra in court over unfair sales to Indigenous customers

The ACCC also reports that Telstra 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 competition regulator said numerous affected customers spoke English as a second or third language, had difficulties understanding Telstra's written contracts, and many were unemployed and relied on government benefits or pensions as the primary source of their limited income.

The ACCC also said some Telstra staff manipulated credit assessments so customers who were otherwise unqualified would get the contracts, like falsely indicating that a customer was employed in some cases.

"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, and these practices continued and caused further, serious and avoidable financial hardship to Indigenous consumers", Rod explained.

The Australian Competition and Consumer Commission (ACCC) has made a decision to initiate a case against Telstra.

ACCC said the Telstra's board and senior executives were unaware of the improper sales practices when they occurred, but managers who learned of the practices failed to do anything about them.

The average debt per consumer was more than $7,400, according to the ACCC.

Telstra acknowledged to the ACCC that it had no effective systems in place to detect or prevent this type of conduct.

ACCC chairman Rod Sims said the debts created by these mobile plans caused great distress to the Indigenous consumers, many of whom were anxious they would be sent to jail for being unable to pay.

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"Telstra has agreed to the filing of consent orders and joint submissions in court in support of penalties totalling $50 million being imposed by the court", the ACCC said.

It is now part of the court's decision whether this sum is appropriate.

Telstra has accepted a $50 million fine, to be confirmed by the court.

Telstra has taken steps to waive the debts, refund money in full and reduce the risk of similar conduct in the future.

Mr Penn said he visited some of the affected communities in person earlier this year to better understand the impact of what had happened.

"We have always taken this matter seriously, however initially we thought these were isolated issues".

In a statement, Telstra CEO Andrew Penn said the organisation was determined to right the wrongs found by the ACCC. "We need to acknowledge when that happens, and today is unfortunately one of those times".

On Thursday morning, the Australian Competition and Consumer Commission confirmed it had taken legal action against the telco provider in the Federal Court following Telstra's admittance of lobbing high cost mobile phone plans on Aboriginal people.


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