Optus cops $6.4m fine for dodgy NBN disconnection claims

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Optus cops $6.4m fine for dodgy NBN disconnection claims

Second fine in two years.

The Federal Court has ordered Optus pay $6.4 million in penalties after the Australian Competition and Consumer Commission pursued it over making misleading claims to customers that their home broadband would be imminently disconnected.

The consumer watchdog's bite on the telco comes after it emailed 138,988 of its own mobile customers in May last year, claiming their existing home broadband services - provided by Optus’ competitors - would be disconnected “very soon”.

Optus’ email urged customers to change to its own NBN Broadband offering, telling them to “make the switch, before it’s too late”.

Broadband users typically have up to 18 months after the NBN becomes available in their area before the old service is disconnected.

However, the Federal Court found that Optus’ actions were misleading or deceptive because the customers who received the email weren’t yet facing the immediate disconnection of their existing services.

ACCC chair Rod Sims said the false sense of urgency may have prevented customers from shopping around for better deals if they feared their broadband would soon be cut off.

“As the NBN rollout nears completion, consumers around Australia are making decisions about whether and when to move onto the NBN, and what services are best for them,” Sims said in a statement.

“The industry should be helping consumers during this process, not providing them with misleading information. We are continuing to watch this area closely.”

“We took this case against Optus because we were concerned its emails created a false sense of urgency for consumers and may have discouraged them from shopping around for the best deal available.”

The ACCC noted that Optus cooperated with its investigations and during the proceedings, which began on 24 June this year.

However, the consumer watchdog also voiced concerns that this is the second time in two years that the Federal Court has ordered the telco to pay hefty penalties for misleading consumers about the need to acquire NBN services - with the first fine landing only two days before the email at the centre of this case was sent.

Over the last decade, the ACCC has insituted proceedings against Optus five times - accepting five court enforceable undertakings from the telco - and issued the telco with 29 infringement notices.

“We expect that this $6.4 million penalty will serve as a warning to Optus and other telcos that they must not mislead consumers about their choices when the NBN is being rolled out,” Sims added.

Still, it's not all bad news in the festive season for Optus.

The ACCC’s announcement of the fine came just minutes after Optus announced a new initiative to donate data to young Australians in need.

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