Optus has agreed to pay a $100 million penalty, pending Federal Court approval, after admitting to systemic unconscionable conduct in selling mobile phones and contracts to hundreds of vulnerable Australians.

The Australian Competition & Consumer Commission (ACCC) launched legal action in October 2024 after uncovering widespread misconduct by Optus sales staff across 16 stores between 2019 and 2023.

Back in May 2021 Telstra agreed to pay $50 million for engaging in similar unconscionable conduct when it sold mobile contracts to 108 Indigenous consumers in an effort to boost sales.

The ACCC also instituted proceedings against Telstra in August 2021 for making alleged false or misleading representations in their promotions of some 50Mbps and 100Mbps NBN plans. Telstra was subsequently ordered to pay $15 million in penalties in that case.

Over 400 Optus consumers, many from First Nations communities or living with disabilities, were sold expensive and unnecessary mobile plans and devices, sometimes without understanding the terms or without coverage in their area.

Some victims accrued thousands in debt and were pursued by debt collectors, even after Optus senior management became aware of the misconduct.

A 2019 internal report revealed falsified documents and fraud at the now-closed Mount Isa store, yet debts were still sold to third-party collectors as late as 2024.

The ACCC says sales commissions created incentives for this misconduct, in breach of consumer protection codes.

In a formal undertaking, Optus has begun compensating affected customers and committed to overhauling internal systems, including retraining staff, reviewing complaint handling, and ending certain commission-based incentives.

Optus will also donate $1 million to support First Nations digital literacy and has started buying back some third-party operated stores.

ACCC Deputy Chair Catriona Lowe described Optus’ conduct as “simply unacceptable”.

Lowe said: “It is not surprising, and indeed could and should have been anticipated, that this conduct caused many of these people significant emotional distress and fear.

“We are particularly concerned that Optus engaged debt collectors to pursue some of these consumers after it had launched internal investigations into the sales conduct.”

The Federal Court will decide whether to approve the $100 million penalty.