Telstra has agreed to pay a $50 million fine after admitting to ‘unconscionable conduct’ in the sale of mobile devices and plans to vulnerable Indigenous customers.
Between January 2016 to August 2018, sales staff at five licensed Telstra stores in the Northern Territory, South Australia and Western Australia used unfair selling tactics when signing up 108 Indigenous consumers to post-paid mobile contracts they did not understand and could not afford.
Many of the consumers spoke English as a second or third language, had difficulties understanding Telstra’s written contracts and lived in remote areas where Telstra provided the only mobile network.
In some cases, staff failed to properly explain the consumer’s financial exposure under the contracts and in some instances even implying consumers were receiving products for ‘free’.
After an 18-month investigation into Telstra’s conduct by the Australian Competition and Consumer Commission (ACCC), the telco giant agreed to penalties totaling $50 million. It is now up to Federal Court to determine whether the figure is appropriate.
“I am deeply and personally disappointed that we have let Indigenous Australians down. It’s just not OK.”
Telstra CEO, Andrew Penn
According to evidence before the court this week, Telstra took steps to address some wrongdoing after becoming “progressively aware of the issues” but some customers waited over a year before their debt was waived and in other instances the practice continued.
The court also heard, employees at one Telstra store in Darwin were trained to target vulnerable Indigenous customers and manipulate credit assessments.
On Tuesday, Reconciliation Australia revoked Telstra’s Elevate Reconciliation Action Plan as a result of the misconduct. An Elevate RAP is the highest status in Reconciliation Australia’s framework.
Speaking with Goolarri Media in the Kimberley region, Telstra CEO Andrew Penn said they currently working with Reconciliation Australia on a new RAP plan.
“The trust with First Nations communities has been affected because we have not picked up this issue quickly enough. What’s most important is working with Reconciliation Australia to rebuild that trust,” he said.
Ahead of the court hearing on Wednesday, Mr Penn took to Twitter to admit, “in large organisations, things do go wrong, and people sometimes do the wrong thing, it happens sadly but we should have been more attuned.”
“I am deeply and personally disappointed that we have let Indigenous Australians down. It’s just not OK,” he said in a video statement.
“Reconciliation Australia’s actions are therefore understandable as they should expect of us to live up to our ambitions of the highest level of the plan and we didn’t. We are 100% committed to reconciliation and what’s most important now is that we rebuild the trust of the Indigenous community.”
Image: Andrew Penn’s Twitter
