Australia fines its telecommunications company Telstra $39 million for exploiting indigenous customers

WION Web Team
Sydney, AustraliaUpdated: May 13, 2021, 04:23 PM IST
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Australia's Prime Minister Scott Morrison and Telstra logo Photograph:(Agencies)

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The fine ordered by a Federal Court judge is the second-largest ever imposed under Australian consumer law

Australia's largest telecommunications company Telstra was fined $39 million on Thursday for unconscionable conduct in selling remote indigenous customers mobile phone contracts that they did not understand and could not afford.

The fine ordered by a Federal Court judge is the second-largest ever imposed under Australian consumer law.

Telstra admitted the offenses in signing up 108 indigenous customers, some of whom spoke English as a second or third language, to mobile phone accounts.

Staff sometimes manipulated credit assessments to say unemployed customers had jobs. They also failed to properly explain the potential costs and falsely represented products as free of cost.

Justice Debra Mortimer said Telstra staff took advantage of an Indigenous cultural propensity to express agreement as a way of avoiding conflict.

The customers owed on average $5,700 and one owed $14,700. Telstra has waived the debts and refunded money.

Telstra chief executive Andy Penn said his company was continuing to resolve the problems.

''I am deeply and personally disappointed that we have let you down. We should have listened more carefully. We should have been more attuned to what was happening. We should have picked this up earlier,'' Penn said in a statement to the customers.

''This brings an end to what has been a deeply challenging and disappointing chapter in our history and one in which we are already taking steps to fix,'' he said.

Alan Gray, based in the Western Australian coastal town of Broome, was among the financial counsellors working in Outback Indigenous communities who raised the alarm. He said he hoped the fine would be a warning to others who exploit Australia's impoverished Indigenous minority.

''Aboriginal people in the Outback get preyed on by a range of companies,'' Gray told Australian Broadcasting Corp.

''The Telstra debt was usually the largest amongst all of them,'' Gray added.

In 2018, the Federal Court fined the Ford Motor Company of Australia $10 million for unconscionable conduct in how it dealt with customer complaints about a faulty type of automatic transmission fitted to some cars.

Dealers knew about the quality issues but blamed owners for their driving styles. Dealers also knew the problems were intermittent but insisted that drivers demonstrate the fault.

(With inputs from agencies)