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

3 days ago
4 min read

In June 2025, Optus agreed to pay a record‑breaking A$100 million, almost its entire profit in the last year, following a case brought by the Australian Competition and Consumer Commission (ACCC) for unconscionable sales and coercive debt collection targeting vulnerable customers. Optus accepted that its staff had been overly agressive and pushed unneeed products on vulnerable and disadvantaged customers.

What makes this case particularly alarming from a risk perspective is the fact that Optus signed customers up to expensive plans and products knowing full well they could not afford them or even use them. This wasn’t mere oversight. It was systemic failure, resulting in Optus being fined $100m for coercive debt collection and unconscionable sales.

Real World Examples of Coercion and Deception

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

A First Nations consumer, with English as a second language and living in an area with no Optus coverage, was approached outside a store and told they were being given free phones. In reality, they were placed on two high‑end phone contracts and three plans plus accessories, totalling A$3 808 over 24 months. The next day, another phone plan was added, costing an additional A$540.
A person living with an intellectual disability walked in with a support worker to purchase a simple A$20 prepaid recharge. Instead, staff pressured them into multiple contracts, 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 purchase thousands of dollars’ worth of phones and accessories despite no realistic way to use them; he was later pursued by debt collectors.

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

Optus chief executive Stephen Rue, who joined the company in November from NBN Co, apologised to customers and called the company’s behaviour “inexcusable and unacceptable”. He said Optus had sacked staff who had engaged in the heavy-handed sales tactics and made other changes to its senior leadership. It has also introduced new sales incentives, better credit checks and a tool that shows where it has network coverage.

‘Predatory behaviour’ ACCC deputy chairwoman Catriona Lowe said some Optus consumers were pursued by debt collectors for years over the unexpected debts, causing 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 said. AFR 18th June 2025

The ACCC’s Role in Protecting Consumers

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

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

The Commission took a strong stance after discovering internal warnings at Optus that the sales culture was driving unethical behaviour. Yet the company persisted. Even as misconduct was identified at stores 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 – A$100 million in fines plus remediation costs.
Reputational risk – Erosion of trust after privacy, outage and sales scandals.
Operational risk – Rigid contract and debt processes that ignored customer hardship.
Cultural risk – Incentivised commission‑driven sales culture that outweighed 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 make the process ethical or legal. In fact, the opposite applies when:

The consumer is clearly disadvantaged
The business has significantly more bargaining power
The consumer did not fully understand the commitment
There was coercion, deception or misinformation

Such conduct is classed as unconscionable and is absolutely enforceable regardless of contract “permissions”.

Other Tactics That Could Be Deceptive or Coercive

To avoid the kind of regulatory backlash seen in the Optus case, businesses should be mindful 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
Avoiding checks on affordability or service delivery (for example, ignoring network coverage)
Not responding to hardship requests and pushing to collection instead
Using commission incentives that reward volume over ethical sales

Laws and Codes That Matter

Australian businesses must align with:

Australian Consumer Law – catchall for unfair and misleading conduct
Telecommunications Consumer Protections Code – requires safeguards for vulnerable consumers
ASIC Act – applies in financial services where aggressive selling is banned
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 detect vulnerability and act appropriately?
Are our commissions aligned with customer‑centred outcomes, not just sales volume?
Do contract and debt collection systems pause when hardship is disclosed?
Are we monitoring for red flags such as no‑coverage areas or multiple contracts for disadvantaged customers?
Are we honestly auditing the harm caused by our processes?

The penalty is the fifth largest to result from ACCC action, and the largest ever against a telecoms business. The largest was a $438 million fine against the Phoenix Institute, a private college that was accused of misleading students into thinking the courses they were enrolling in were free when they charged an average of $37,000. Phoenix has since collapsed.

Optus’ case shows how quickly contracts can turn from assets into liabilities when signed under unfair or deceptive circumstances. It underlines a broader risk management truth: Contracts are just paperwork unless backed by culture, ethics and accountable systems.

Ethical business means aligning legal rightness with fairness and transparency. That is the ultimate risk mitigator.