Finance Finance News Optus faces $10m fine for misleading conduct

Optus faces $10m fine for misleading conduct

Optus has been fined for telling customers that their home internet was being disconnected and they should switch to Optus. Photo: AAP
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Optus mobile customers are being urged to check their accounts, after at least 240,000 customers were charged for content they did not want and had not agreed to buy, including games, ringtones or horoscopes.

The consumer watchdog is taking action against the telco for misleading customers with its ‘direct carrier billing’ service, which allowed automatic charges for third-party content to be added to Optus accounts.

The ACCC and Optus have made a joint application to the Federal Court seeking a $10 million dollar fine – the same penalty paid by Telstra for misleading or false representations about its own premium content billing.

Optus has admitted it was aware of the situation from at least April 2014 and that it failed to properly inform customers that the service was part of its default account setting.

“A substantial number of Optus customers were signed up to subscriptions for expensive, often unwanted, content without being required to enter payment details or verify their identity, as occurs with many other online purchases,” said ACCC chairman Rod Sims.

“Many customers didn’t realise they were signing up to anything at all and, in some cases, family members such as children incurred these charges without the account holder’s knowledge.”

The offending content was provided by third-party developers and not purchased through usual app marketplaces such as Google Play or the App Store. It included news websites, voting in television programs and downloadable games and ringtones.

Optus said it stopped the general direct billing service in late August but continues to offer it for one-off content, requiring customers’ agreement for each purchase to be charged to their Optus account.

“We apologise to our customers and will communicate with affected customers and encourage them to contact Optus to discuss their circumstances,” the telco said in a statement.

So far, $31 million has been refunded to around 240,000 customers, including $12 million repaid by Optus directly and $19 million by third party providers.

“Optus customers are encouraged to check their mobile accounts and, if they believe unauthorised charges have been applied under the [direct carrier billing] service, they should contact Optus to seek a refund,” said the ACCC.

Earlier this year, Telstra was fined for similar behaviour and last month said it had refunded more than $9.3 million to 72,000 customers.