Telstra will pay the second highest fine ever imposed under Australian consumer law, and federal court has ordered the telecommunications company to pay $ 50 million plus costs after admitting to selling mobile devices and plans to indigenous customers who own them couldn’t afford.
The decision follows a lengthy ACCC investigation. Revenue between January 1, 2016 and August 27, 2018 comprised 108 customers in NT, SA, and WA. Part of their debt was then sold to third-party collection agencies.
Andy Penn, Telstra CEO, said he accepted the court’s decision and swore to rebuild trust.
« Today the federal court officially approved the settlement. This ends an extremely challenging and disappointing chapter in our history, in which we are already taking steps to rectify it, » he said.
« Again, I apologize to all of the indigenous customers affected by this. I am deeply and personally disappointed that we have let you down. We should have listened more closely. We should have been more attuned to what was happening. We should. » have taken up this earlier.
« It is clear that we need to better understand and support our indigenous customers. This means that, like I have, I have spent time with country several times since this issue came to light and will continue to do so. » Listening to and learning from indigenous customers. » Customers and communities, meetings with community leaders, elders, and indigenous organizations. »
He said Telstra has taken steps to issue full refunds with interest, waive debt, and allow most customers to keep their devices to do things right.
« A First Nations Connect hotline now in Darwin provides language assistance to these customers. Our cultural awareness training has been improved and is now mandatory for everyone at Telstra dealing with indigenous consumers. A new Indigenous Cultural Compliance Officer has been appointed and is now tasked with reviewing and continuously improving the way we interact with indigenous customers and fulfill our commitments to them, « he said.
Rod Sims, chairman of the ACCC, said that in some cases Telstra’s salespeople in licensed stores failed to properly explain to consumers the potential cost of the contract and falsely stated that consumers would get products « free of charge ».
« We expect much better behavior from big companies like Telstra, but it is a responsibility of all companies in Australia to ensure that salespeople don’t break consumer laws by manipulating or tricking consumers into buying products or services they don’t need or need can’t afford, « he said.
« This behavior included manipulating credit checks and misrepresenting products as free, as well as exploiting the social, linguistic, literary and cultural vulnerabilities of these indigenous customers.
« Telstra’s board of directors and officers did not act quickly enough to stop these illegal practices when they were later brought to their attention. »
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