Woman’s bill complaint leads to $50m fine
When Caitlyn Roe sought help over a crippling Telstra bill, she had no idea it would eventually be the telco that ended up paying an eye-watering price.
The young mum was one of 108 Indigenous customers across three states and territories who found themselves in a similar battle against Telstra, with the Australian Competition and Consumer Commission (ACCC) eventually launching proceedings on their behalf.
Yesterday, the Federal Court ruled in their favour, ordering Telstra to pay a staggering $50 million in penalties for engaging in unconscionable conduct when it sold mobile contracts to dozens of Indigenous consumers.
The communications giant admitted that between January 2016 and August 2018, it breached the Australian Consumer Law and acted unconscionably when staff at five stores signed up 108 Indigenous customers to multiple postpaid mobile contracts which they did not fully understand and could not afford.
"They wanted that full amount - right or wrong, they wanted it," she said. "I was like, 'Jesus, I'm battling to put away money for food and bills'," Ms Roe told the ABC of her early struggle with the company, which saw her hounded by debt collectors.
"I thought I was going to go to jail.
"It put me in a big, dark place I didn't really want to be."
But yesterday ended in a massive victory for Ms Roe and many other fellow customers.
"Sales staff in these Telstra-branded stores used unconscionable practices to sell products to dozens of Indigenous customers who, in many cases, spoke English as a second or third language," ACCC Chair Rod Sims said in a statement following the court ruling.
"This conduct included manipulating credit assessments and misrepresenting products as free, and exploiting the social, language, literacy and cultural vulnerabilities of these Indigenous customers.
"Telstra's board and senior executives failed to act quickly enough to stop these illegal practices when they were later alerted to them."
Mr Sims confirmed the $50 million fine was the second highest penalty ever imposed under the Australian Consumer Law.
"This is appropriate given the nature of the behaviour by Australia's biggest telecommunications company, which was truly beyond conscience," he said.
According to the ACCC, some staff in question failed to properly explain the potential costs of the contract to the consumers and falsely represented that consumers were receiving products for "free".
In some cases, sales staff also manipulated credit assessments, so consumers who otherwise may have failed its credit assessment process could purchase postpaid mobile products. This included falsely indicating that a consumer was employed when they were not.
Telstra has since taken steps to waive the debts, refund money paid and put in place measures to reduce the risk of similar conduct in the future.
"We expect much better behaviour from large businesses like Telstra, but all businesses in Australia have a responsibility to ensure sales staff are not breaching consumer law by manipulating or tricking consumers into buying products or services they do not need or cannot afford," Mr Sims said.
Telstra admitted liability, co-operated with the ACCC's investigation and made joint submissions with the ACCC to the Court in relation to penalty and other orders.
Many of the affected customers were from remote Indigenous Australian communities in the regions surrounding Darwin, the islands off Northern Territory, the Kimberley region and the Anangu Pitjantjatjara Yankunytjatjara Lands (APY Lands) in Central Australia.
Originally published as Woman's bill complaint leads to $50m fine