ASIC forcing Optus to pay back $2.4 million to around 175,000 customers

A breach of trust by a major telco will mean it now has to refund its customers $2.4 million.

ASIC forcing Optus to pay back $2.4 million to around 175,000 customers

A major telco will be compelled to pay refunds after the Australian Securities and Investments Commission (ASIC) found it had overcharged around 175,000 customers for phone insurance.

It is believed that Optus will pay out a total of around $2.4 million in refunds as a result of ASIC’s intervention.

Optus will also be required to inform around 500,000 customers of its breach of trust.

ASIC claims that, although it could have sought lengthy court action and further penalties upon Optus, its priority was to get money back into the hands of the telco’s customers.

"In this instance we were focussing on getting the money back into the customers' pockets," said ASIC Deputy Chairman Peter Kell. "We decided to do that as quickly as possible rather than go through a court case, which may last for a longer period, so our priority was to get the money back to customers in this case."

The breach in question related to Optus not supplying key documents required as part of its financial services licence, such as a full product disclosure statement and a financial services guide to its customers who bought mobile phone insurance.

The telco has also reported other breaches, such as incorrectly charging customers and supplying the wrong type of cover.

According to ASIC, Optus had "inadequate compliance systems and processes, such as training, monitoring and supervision of staff" and so it was necessary that the telco compensated its customers.

"It is important that when a business is licensed by ASIC to sell financial products to retail consumers, it ensures that it does so consistently with the representations it has made to consumers, and in compliance with the financial services laws," said Mr Kell. "Where consumers have suffered a detriment, it is important that remediation is undertaken, and that steps are taken to ensure that the business is operating in compliance with the relevant legal obligations."

Other breaches incurred by Optus include:

  • not applying promotional discounts
  • incorrect charges
  • providing incorrect and more expensive cover
  • failing to pass on information about excesses and cooling-off rights.

Optus must now face an independent inquiry to ensure that no further breaches take place.

Read more at www.abc.net.au

Are you an Optus customer? Do you feel you have been misinformed about your mobile phone contract? Are you satisfied with the ASIC ruling or should they have pursued Optus through the courts?

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    COMMENTS

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    jackie
    13th Jul 2016
    10:18am
    I was their customer for years until they got too greedy and increased their bundle rates. They put mass profit before customer and now it has backfired.
    MICK
    13th Jul 2016
    2:12pm
    I am paying more than Optus charges. If you read my post above you'll see why. Price is one thing but how this company operates is another and not worth going through this a third time.
    HarrysOpinion
    13th Jul 2016
    11:08am
    Telcos and other financial service providers are all guilty of the crime of deceptive conduct to make a financial gain. Some people would prefer that all the directors be thrown in jail for 12 months or longer, rather than to get refunds.
    MICK
    13th Jul 2016
    2:14pm
    The industry is UNREGULATED and the sham regulator (TIO) is an industry body not a government one. So if you have an issue the TIO will find in favour of the telco. I have been there.
    Rosret
    13th Jul 2016
    11:27am
    Every time ASIC (or whoever) makes a decision where a publicly owned business is responsible the "fine or reimbursement" is immediately transferred to the customer in increased costs. For example; when Woolworths was fined $m for colluding with the price of concentrated soap power all of a sudden the food commodity prices went up well above even independent grocery prices. We pay. Its time the executives of the companies paid the toll not the shareholders and the customers and maybe they would start making more responsible decisions for their actions.
    HarrysOpinion
    13th Jul 2016
    1:03pm
    Why doesn't ASIC put an embargo condition for next three years that prevents Woolworths doing that?
    MICK
    13th Jul 2016
    2:15pm
    Does that not advantage the competition?
    KSS
    13th Jul 2016
    3:01pm
    Not only that Rosret, both Coles and Woolworth are no longer selling the range of laundry powders switching to liquids instead. You now cannot buy products that just a couple of months ago were on all the shelves.
    Ted Wards
    13th Jul 2016
    11:34am
    As an excustomer who was with them for years I am not surprised. This has been going on for a long time and its not only Optus. I have caught Vodafone several times over charging me, the latest yesterday but this time I am reporting them with the photographic evidence I took. For too long these companies have been charging what they want and their staff are not well trained. Its a case of depends who you talk to as to what answer you get! Lets hope this is the beginning of these wroughts being uncovered and the industry be more accountable and lock in contracts become a thing of the past.
    MICK
    13th Jul 2016
    2:18pm
    Read "ProductReview Optus". It'll make your hair stand on end. Even worse than that MOST of the telcos have a similar rating.
    I will never again be doing business with Optus. Readers should take note as this is not for a minor issue but rather because of gross intentional negligence, a cover-up and then avoiding mandatory compensation due to dishonesty.
    KSS
    13th Jul 2016
    12:43pm
    Can they also look at the rort of charging you to pay a bill in any other way than that which THEY want i.e. direct debit? Even if you pay by EFT on time Optus charge $2 for the privilege of you paying your bill. And don't forget there is another charge if you want a paper bill too.
    HarrysOpinion
    13th Jul 2016
    1:06pm
    It's constructive stealing. But, authorities don't give a damn. I think the authorities think , "if you can't beat them, join them and make some bucks out of the opportunity for themselves".
    Anonymous
    13th Jul 2016
    1:59pm
    Paper posted bills and EFT charges are waived for pensioners.
    KSS
    13th Jul 2016
    3:01pm
    But the SFRs!
    MICK
    13th Jul 2016
    2:11pm
    Optus? Why does this not surprise me?
    Our phone and internet were disconnected by Optus due to its negligence. The company is a total basket case and it took over 2 MONTHS to restore our service, which required the intervention of the TIO (Telecommunications Ombudsman's Office...which is an Industry body, not a government one!) and the Minister. Optus did not care because it had no way of being held to account.
    Optus has an India Call Centre staffed by essentially monkeys who just keep transferring you around the Centre. I spent 7 hours straight one day with no resolution in sight and was coerced into opening a new account, as was my wife, before they would look at the account. After that these monkeys did nothing.
    Even when the issue eventually got back to the Australian arm of the operation we struck another total nitwit who blamed us for the disconnection when it was Optus.....as had been the case 2 years previously.
    My advice to anybody who is with Optus is to not risk what happened to us and change ISPs. You might be happy now but if what happened to us happens to you it will significantly impact your life and cause stress which is of the scale.
    Readers need to google "ProductReview Optus" and it will be clear where I am coming from. All the other ISPs can be checked out in the same manner. It will be quickly understood why we chose Internode as our new ISP.
    The Telecommunications Industry is UNREGULATED and that is why so many of the telcos do not give a damn. And you thought only the banks were bad? I have to wonder about the level of election contributions this industry makes into Liberal Party coffers.
    Rose
    13th Jul 2016
    2:44pm
    The same happened to me.I was charged incorrectly but they always answered I was wrong, till I left. I have now a pre-paid mobile.No contracts with Optus.
    MICK
    13th Jul 2016
    4:37pm
    Small change compared to what they will do to you if they disconnect.
    Angie
    13th Jul 2016
    7:29pm
    My provider says " unlimited" data. What is the telco definition of " "unlimited data" they say this but it's not true as I get messages that I exceeded the limit . Is there fun print that I did not read? Why don't they say how much is the limit. Is this against the law ? I keep feeling I am being robbed.