Thursday, 07 February 2019 04:54

Optus fined $10m for misleading users over digital purchases Featured

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Telco Singtel Optus has been hit with a $10 million fine by the Federal Court for its treatment of customers who unwittingly bought content through the telco's third-party billing service.

A statement from the Australian Competition and Consumer Commission, which initiated action against Optus, said the telco had admitted misleading consumers and breaching the ASIC Act by billing customers for content produced by third parties which they purchased by mistake through Optus' direct carrier billing service.

Telstra paid a fine of the same amount last year for similar conduct.

The ACCC said about 240,000 Optus customers had been refunded and the telco had paid about $8 million in refunds, while third-party providers had paid another $13 million.

The consumer watchdog said Optus had confessed the DCB service was a default setting on users' accounts and that they would be billed for any content bought through the service, even if this took place unintentionally.

The telco earned commission from the sales and admitted it knew from at least April 2014 that customers were being billed for content they had signed up for in error.

Optus' lack of action was despite receiving more than 600,000 inquiries about the service. No ID checks were put in place and inquiries were directed to third parties.

Customers encountered great difficulty in cancelling the purchases and getting refunds.

“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,” ACCC chair Rod Sims said.

“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 advised customers who suspected they had incurred unauthorised charges to contact Optus on 13 39 37.

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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