Optus Fined $100m for Coercive Debt Collection and Unconscionable Sales

Jessica Urquhart
Jun 22
4 min read

Updated: Oct 31

In June 2025, Optus agreed to pay a record-breaking A$100 million, almost its entire profit from the last year. This was in response to a case brought by the Australian Competition and Consumer Commission (ACCC) for unconscionable sales and coercive debt collection aimed at vulnerable customers. Optus acknowledged that its staff had been overly aggressive, pushing unnecessary products on vulnerable and disadvantaged individuals.

The Alarming Reality of Corporate Misconduct

What makes this case particularly alarming is that Optus signed customers up for expensive plans and products, fully aware they could not afford them or use them. This wasn’t mere oversight; it was a systemic failure. As a result, Optus faced a hefty fine of $100 million for its coercive debt collection practices and unethical sales tactics.

Real-World Examples of Coercion and Deception

Here are some documented practices that triggered the fine and regulatory action:

A First Nations consumer, with English as a second language and living in an area without Optus coverage, was approached outside a store. They were told they were receiving free phones. In reality, they were signed up for two high-end phone contracts and three plans—with accessories—totalling A$3,808 over 24 months. The next day, another phone plan was added, costing an additional A$540.
A person with an intellectual disability came in with a support worker to buy a simple A$20 prepaid recharge. Instead of that, staff pressured them into multiple contracts, including a phone, plan, smartwatch, and accessories under a false ABN, totalling over A$8,000 over 36 months.
A deaf, mute, and homeless man was convinced to buy thousands of dollars-worth of phones and accessories despite having no realistic way to use them. He was later pursued by debt collectors.

These customers included young, elderly, disabled, or First Nations individuals. Many later had their debts referred to collectors, leading to years of financial and emotional struggles.

CEO's Apology and Company's Changes

Optus CEO Stephen Rue, who joined the company in November from NBN Co, apologized for the company's behavior, describing it as “inexcusable and unacceptable.” He stated that Optus had terminated staff who engaged in these aggressive sales tactics. Additionally, the company made changes to its senior leadership. New sales incentives, better credit checks, and a tool to indicate network coverage areas were also introduced.

“Predatory behaviour,” said ACCC Deputy Chairwoman Catriona Lowe, noting that some Optus consumers faced years of pursuit by debt collectors over unexpected debts. This caused them significant emotional distress and fear. "We are particularly concerned that Optus engaged debt collectors to pursue some of these consumers after it had launched internal investigations into the sales conduct," Lowe stated. AFR 18th June 2025

The ACCC’s Role in Protecting Consumers

The ACCC enforces the Australian Consumer Law (ACL), which prohibits:

Unconscionable conduct, including taking advantage of vulnerable consumers.
Misleading or deceptive conduct.
Coercion or pressure to sign contracts.
False representations about cost or coverage.

After discovering internal warnings at Optus regarding its sales culture, which drove unethical behavior, the Commission took a strong stance. Despite these warnings, the company continued its practices. Even when misconduct was identified in stores located in Darwin and Mount Isa, debt collectors were still engaged against customers who clearly could not afford their contracts.

Business Risks Exposed by This Case

From a risk management perspective, the Optus saga highlights five key domains of failure:

Legal risk – Breaches of ACL and the Telecommunications Consumer Protections Code.
Financial risk – An A$100 million fine, plus remediation costs.
Reputational risk – Erosion of trust following privacy, outage, and sales scandals.
Operational risk – Unyielding contract and debt processes that ignored customer hardship.
Cultural risk – An incentivized, commission-driven sales culture overshadowing ethics.

Optus’ reliance on signed contracts became a false shield. Signing did not mean consent was fair or informed. Courts and regulators will judge coercive processes, not just outcomes.

Contracts Alone Don’t Shield You

Even when a customer signs an agreement, that does not ensure the process is ethical or legal. On the contrary, it raises concerns when:

The consumer is clearly disadvantaged.
The business holds significantly more bargaining power.
The consumer does not fully understand the commitment.
There is coercion, deception, or misinformation involved.

Such conduct is classified as unconscionable and is fully enforceable, regardless of contract “permissions.”

Potentially Deceptive or Coercive Tactics

To avoid regulatory backlash like that seen in the Optus case, businesses should be informed of these risk hotspots:

Pressure tactics to sign up elderly or cognitively impaired customers.
Bundling items and implying they are free when they are not.
Ignoring checks on affordability or service delivery, such as network coverage.
Overlooking hardship requests and pushing for collections instead.
Implementing commission incentives that reward volume over ethical sales.

Laws and Codes That Matter

Australian businesses must ensure alignment with:

Australian Consumer Law – A comprehensive law guarding against unfair and misleading conduct.
Telecommunications Consumer Protections Code – Mandates safeguards for vulnerable consumers.
ASIC Act – Relevant in financial services, where aggressive selling is strictly prohibited.
Privacy Act – Misuse of personal data in sales or collections can further harm consumers.

What Risk Leaders Should Do

Ask yourselves:

Do our frontline staff know how to identify vulnerability and act appropriately?
Are our commission structures aligned with customer-centered outcomes, rather than merely sales volume?
Are our contract and debt collection systems designed to pause when hardship is disclosed?
Are we monitoring for warning signs, such as no-coverage areas or multiple contracts for disadvantaged customers?
Are we conducting honest audits on the harm caused by our processes?

The penalty imposed was the fifth largest resulting from ACCC action, and the largest ever against a telecommunications firm. The largest fine was a $438 million penalty against the Phoenix Institute, a private college accused of misleading students into believing their courses were free—despite an average enrollment fee of $37,000. Phoenix has since collapsed.

Optus’ case illustrates how contracts can quickly turn from assets into liabilities when signed under unfair or deceptive conditions. It highlights a broader risk management truth: contracts are simply paperwork unless supported by culture, ethics, and accountable systems.

Ethical business practices require aligning legal correctness with fairness and transparency. This is the ultimate risk mitigator.

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