Optus faces $10m fine, pays millions in refunds

Optus has handed millions of dollars back to more than 240,000 customers and could pay at least $10 million in fines over “premium content” charged to users who didn’t sign up for it or want it.

The telco has agreed with the Australian Competition and Consumer Commission (ACCC) to jointly apply for orders from the Federal Court.

“The Federal Court will decide at a later date whether the orders sought, including the proposed penalties, are appropriate,” the ACCC said in a statement.

Optus has committed to offer refunds for affected customers, estimated to be “more than 240,000”. Optus has directly forked out $12 million and content providers $19 million in the refund process.

According to the ACCC, “Optus has admitted that it was aware, from at least April 2014 … [that] a significant number of customers [were] charged by Optus for premium content such as ringtones, games, horoscopes, etc. that they did not want and had not agreed to buy.”

Optus also admitted that it didn’t inform customers that they would be billed for these add-ons by default “and that if customers received premium content via their phone, even unintentionally, they would be billed by Optus for it.”

“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,” ACCC chair Rod Sims said.

“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.

“Despite over 600,000 direct enquiries Optus received over a number of years about this, Optus chose to continue to generate major profits at the expense of basic consumer protections.”

Optus dumped third-party content subscriptions at the end of last year.

Rival Telstra was fined $10 million for a similar operation and has so far issued $14.3 million in refunds to affected customers. It, too, shut down third-party content subscriptions.=

Sims said the ACCC “is continuing its investigation into third party billing services by other carriers, and further enforcement action may well follow.”