Optus hit with $6.4 million fine for misleading customers

Written on the 2 December 2019 by Business News Australia

Optus hit with $6.4 million fine for misleading customers

A marketing email has cost telco Optus $6.4 million in penalties after the Federal Court determined it to be misleading.

Following proceedings brought by the Australian Competition and Consumer Commission (ACCC), the Federal Court found that Optus made misleading claims about home internet disconnections to consumers.

The case revolved around an email to 138,988 of its own mobile customers, claiming their existing home broadband services, provided by Optus' competitors, would be 'disconnected very soon'.

The email also encouraged customers to switch to Optus NBN Broadband, telling them to 'make the switch, before it's too late'.

This statement was found to be misleading or deceptive by the Federal Court because the customers who received the email in question were actually not facing immediate disconnection of their existing broadband services.

ACCC chair Rod Sims says the case is particularly important considering the rollout of the NBN is still ongoing.

"As the NBN rollout nears completion, consumers around Australia are making decisions about whether and when to move onto the NBN, and what services are best for them," says Sims.

"The industry should be helping consumers during this process, not providing them with misleading information. We are watching this area closely."

"We took this case against Optus because we were concerned its emails created a false sense of urgency for consumers and may have discouraged them from shopping around for the best deal available."

This is the second time in two years that the Federal Court has ordered Optus to pay penalties for misleading consumers about the need to acquire NBN services.

In May 2018 the Federal Court ordered Optus to pay $1.5 million in penalties for misleading customers about their transition from the Optus HFC network to the NBN.

The Court found that Optus benefitted by around $750,000 as a result of the conduct.

"We are concerned about Optus' recent track record in misleading consumers about the NBN," says Sims.

"We expect that this $6.4 million penalty will serve as a warning to Optus and other telcos that they must not mislead consumers about their choices when the NBN is being rolled out."

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