Optus fined 10 million for misleading customers over digital purchases

Optus has been slapped with a $10 million penalty for misleading and charging customers. The penalty related to digital purchases through its direct carrier billing (DCB) service.

The ACCC took Optus to Federal Court back in October last year after the company admitted it misled customers and contravened the Australian Securities & Investments Comission Act 2001. The contravention arose when Optus billed customers for third party-produced content which they mistakenly bought or subscribed to through its “direct carrier billing” (DCB) service.

What did Optus admit?

Optus admitted that it failed to properly inform its customers that the DCB service was a default service on their mobile accounts. It also failed to advise that the customer would be continually billed directly by Optus for any content bought through the service, even if unintentionally.

As if that weren’t bad enough, Optus admitted that it earned commissions on items sold through the DCB service, including those items that customers had unintentionally purchased (or purchased without full knowledge of the implications).

In short, not only did it allow customers to unwittingly buy through the DCB service, but it also profited from customers mistaken purchases. Unsurprisingly, the ACCC has taken a dim view (and so has the Federal Court).

What did the regulators say?

The ACCC notes that despite over 600,000 enquiries about Optus’ DCB service, the company failed to put in place appropriate ID verification safeguards, and referred customers who sought to query DCB service charges to third parties.

ACCC chair Rod Sims as said that the decision:

“In many cases, Optus customers had no idea they were buying anything, and certainly did not need or want the content for which they were being charged.

Optus failed to take appropriate action, choosing instead to continue to charge customers and collect commissions on these sales, even after numerous complaints.

We are pleased that the Court agreed that this conduct is simply unacceptable, and deserves a significant penalty,”

The ACCC as acknowledged that Optus has refunded about 240,000 customers so far, with about $8 million paid out by Optus and another $13 million from its third party providers.

Where to from here?

Optus has committed to contacting potentially impacted customers who maybe effected and not yet received a refund as of yet, with the company will also review any future complaints in light of this decision.

Optus customers who may have been charged for the DCB service are encouraged to check their Optus mobile account and, if they believe unauthorised charges have been applied under the DCB service, they should contact Optus on 13 39 37.