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  • Optus facing a $10 million penalty for misleading customers
  • By Jennifer Duke
  • 17/10/2018 Make a Comment
  • Contributed by: Pina ( 11 articles in 2018 )
ACCC chairman Rod Sims says companies now face serious financial damage if they breach consumer laws.
The competition regulator is looking to hit Singtel Optus with a $10 million penalty, after years of directly billing customers for ringtones and subscriptions that potentially misled more than 240,000 people.

Optus earned $66 million in revenue from the billing scheme, charging customers a combined $195 million.

Since April 2014, Optus’ billing arrangements resulted in some customers being slugged with charges for content they did not want, such as ringtones, games and horoscopes, with one click that added a cost to their bill. About two million customers were charged each year.

The Australian Competition and Consumer Commission commenced proceedings in the Federal Court against Optus, while Optus admitted it made false or misleading representations and will jointly apply with the regulator for orders from the court.

This will include a proposed $10 million penalty. While new laws came into place in November that could allow the regulator to slug offenders with much higher penalties, this does not apply to offences that happened before the rules came into place.

Optus earned $66 million in revenue from the billing scheme, charging customers a combined $195 million. So far, Optus has refunded $12 million and third party providers refunded $19 million, to 240,000 customers.

Optus customers have been encouraged to contact the telecommunications company if they think they're eligible for a refund.

ACCC chair Rod Sims told Fairfax Media that companies who broke consumer law rules should expect penalties "closer to $100 million" in future.

"With the change in law I'm very hopeful we'll be getting penalties some multiples higher that will go some way to deterring this behaviour," Mr Sims said.

Telstra was ordered to pay a $10 million penalty in April, after its similar charges were found to have potentially misled more than 100,000 people, in what was the equal biggest payout on record under consumer law.

"Telstra and Optus had clearly the worst behaviour [of the telcos] we are looking at in this case," he said. Optus had over 600,000 customer inquiries about the billing while it ran.

He warned another telco was on their radar for scrutiny over a similar billing issue, but said it wasn't as clear cut that there would be another penalty involved with more investigation needed.

Optus vice president of regulatory and public affairs Andrew Sheridan said in a statement Optus was refunding affected customers, with the service ended on August 24 apart from a "limited number of services for one-off content".

"We acknowledge that some customers may have inadvertently subscribed to content they did not want or could not easily unsubscribe from," Mr Sheridan said.

"Optus has committed to undertake a comprehensive review of customers affected by this activity and to provide refunds where appropriate, taking into consideration the fact that some customers may already have been refunded."


Source: https://www.smh.com.au/business/companies/optus-facing-a-10-million-penalty-for-misleading-customers-20181017-p50a6h.html


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