Australia’s biggest telecommunications provider, Telstra has admitted to unconscionable conduct during its deals of mobile phone plans to Indigenous consumers. Telstra will face court and a penalty of up to $50 million.
It would be the second-highest penalty imposed under Australian consumer law. The legal action against the biggest telecommunications company, Telstra was taken on Thursday.
The telecommunications giant agreed between 2016 and 2018 they breached consumer laws for poor sales practices that took place in five Telstra stores in South Australia, Western Australia, and Northern Territory.
The concession has advised Australia’s competition regulator to begin proceedings of federal court.
The court potential penalty and hearing follows a year-long investigation by the ACCC into potential breaches of consumer law by the Telstra.
The chairman of the ACCC, Rod Sims, said Telstra had aimed “extremely vulnerable customers”.
He said, “Telstra sold products to people who did not know, they did not need, and often they could not afford.”
“These were so low-income consumers. The team often manipulated the balance assessments, so they would match within or confer any ability to return the funds owed,” Rod Sims said.
Rod Sims continued “This is much adverser because of the exploitation of social, language, cultural, and literacy vulnerabilities. The anxiety and massive stress this caused for the individuals concerned. ”
“People were in great concern and 70 per cent of the cases, Telstra put the debts in support of debts collectors,” he said.
Teresa Corbin, chief executive of the Australian Communications Consumer Action Network, said the Telstra’s behaviour was really disappointing.
Thursday’s announcement came after the ACCC’s long 18-month investigation when financial counsellors raised serious concerns in remote and rural areas.
In 2019, financial counsellors told the customers were being sold unaffordable phone plans and were then aggressively hounded by debt collectors.
The ACCC said Telstra had admitted to permission orders that would support a sentence totalling $50 million, but eventually, it will be up to the court to judge how much Telstra should pay.