Firm also terminates retail sales staff involved in the incidents
Optus has agreed to pay a proposed $100 million penalty after admitting to inappropriate sales practices involving employees from 2019 to 2023.
The telecommunications firm admitted that its sales staff acted unconscionably when selling phones and contracts to more than 400 consumers at 16 different stores across Australia between August 2019 and July 2023.
It agreed to pay a total penalty of $100 million, which remains subject to Federal Court approval.
"I would like to sincerely apologise to all customers affected by the misconduct in some of our stores," said Optus CEO Stephen Rue in a statement.
"Optus failed these customers, and the company should have acted more quickly when the misconduct was first reported."
According to the CEO, numerous executive and senior leadership changes have been carried out because of the incidents. Disciplinary action has also been taken in "some circumstances," including the termination of retail sales staff who were found responsible for inappropriate sales practices.
"This is not what Optus stands for and we will hold ourselves to a higher standard going forward," Rue said.
Optus's admission of unconscionable conduct comes after a court action brought by the Australian Competition and Consumer Commission (ACCC).
According to the commission, some of the conduct engaged in by the sales staff included pressuring customers to purchase products, including expensive phones and accessories, that they did not want or need, and could not use or afford.
They also failed to explain to consumers the terms and conditions, which resulted in a lack of understanding over payment obligations. They also did not consider whether consumers had Optus coverage where they lived, and misled customers into believing that goods were free or included as part of a bundle at no additional cost.
In the case of the now-shuttered Mount Isa store, Optus also admitted to pursuing debts despite senior management already knowing that those debts related to contracts that had been or might have been created without the knowledge of the affected customers.
Many of the affected consumers were vulnerable or experiencing disadvantage, according to the ACCC. They include people with a mental disability, diminished cognitive capacity, unemployed or financially dependent, or who had limited financial literacy.
It further noted that many of the consumers were First Nations Australians from regional and remote parts of Australia.
"The conduct, which included selling inappropriate, unwanted, or unaffordable mobiles and phone plans to people who are vulnerable or experiencing disadvantage, is simply unacceptable," said ACCC deputy chair Catriona Lowe in a statement.
"Many of these consumers who were vulnerable or experiencing disadvantage also experienced significant financial harm. They accrued thousands of dollars of unexpected debt and some were pursued by debt collectors, in some instances for years."
Lowe said Optus has committed to changing its systems, and it has also begun compensating affected consumers.
The ACCC also accepted an undertaking from Optus that commits it to changing the remuneration structure of sales staff to disincentivise them from engaging in similar conduct.
The telecommunications firm has also undertaken to make a $1-million donation to an organisation facilitating the digital literacy of First Nations Australians.
According to Optus, it has begun hiring a number of financial counsellors to provide community-based support and guidance for the remediation process.
"I am leading the implementation of extensive changes across the company with active responses to the issues raised well underway," Rue said.
"However, there is much more to do as we work to regain our customers' trust and improve support and protections for them, especially for those who are vulnerable."
