Optus slapped with $1.5 million fine over NBN migration

Telco agrees to upgrade complaints-handling process

Optus has been ordered to pay $1.5 million over misleading 14,649 of its customers with hybrid fibre-coaxial (HFC) services about migration to the National Broadband Network.

The fine resulted from Federal Court action launched by the Australian Competition and Consumer Commission (ACCC) after Optus told HFC customers “that Optus Internet had the right to cancel each customer’s service on a particular date, or within a specific period of time, in circumstances where Optus Internet had no such right,” Justice Moshinsky found.

Optus had told some customers that their services would be cancelled within as short a timeframe as 30 days, the ACCC said.

Justice Moshinsky found that Optus also told more than 8400 households on its HFC network that they would need “to acquire services provided using the National Broadband Network ... from Optus Internet in order to receive home telephone and/or internet services, in circumstances where they had no such need.”

Optus benefited by around $750,000 as a result of its actions, the ACCC said.

“Optus pressured customers by misrepresenting the time period in which services could be disconnected,” ACCC chairperson Rod Sims said in a statement.

“Businesses should not make false representations which distort customers’ decision making.  This is particularly important when many Australians are moving to the NBN for the first time.

“It is illegal for businesses to mislead their customers and create a false impression through their communications. Today’s penalty serves as a warning to all businesses that such behaviour will be met with ACCC action.”

Optus cooperated with the ACCC investigation, including agreeing on a statement of facts and joint penalty submissions to the court.

Under the terms of the judgement Optus is compelled to “implement an upgraded complaints handling system for consumer law complaints made to Optus Internet that relate to the NBN ... for a period of three years”.

“In response to industry changes driven by the NBN, Optus is transforming its fixed business from being an infrastructure provider to a services reseller,” an Optus spokesperson said. “In late 2016, we made the decision to proactively migrate customers off Optus’ cable network to the NBN as soon as an area becomes serviceable.”

Optus said it is aiming for a “seamless experience” when migrating customers to the NBN.

“However, during this process, we provided some customers with insufficient notice of their options to migrate and some customers were disconnected before they migrated to the NBN,” the spokesperson said.

Optus has apologised to customers and offered compensation.

“Optus has also established a revised set of migration processes for its cable customers that we believe will deliver customers the migration experience they expect,” the spokesperson said.  

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Tags broadbandNetworkingoptusNational Broadband Network (NBN)Australian Competition and Consumer Commission (ACCC)

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