Financial counsellors around Australia welcome today’s announcement by the ACCC that Telstra and the ACCC will be asking the Federal Court to impose a penalty of $50 million on the telco. The penalty relates to unconscionable conduct in its’ dealings with 108 Indigenous customers.
Telstra has admitted it breached consumer law and acted unconscionably between January 2016 to August 2018. It has also agreed to pay the multi-million dollar penalty. It is a matter for the Court to decide whether this penalty will be appropriate.
The ACCC began investigating allegations of unconscionable conduct by Telstra after financial counsellors approached the regulator with 96 initial cases from across the Northern Territory, South Australia and Western Australia.
Financial counsellors first noticed the concerning behaviour over three years ago.
Telstra staff in five stores convinced Indigenous consumers to sign up to multiple post-paid mobile contracts which they did not understand and could not afford.
Many accumulated massive debts – one as much as $19,000.
Some of these debts were then sold to debt collectors, which only increased pressure on the consumers to repay them.
Many of the people involved spoke English as a second or third language and some even lived in areas without mobile phone coverage.
This case shows the vital role that financial counsellors play on the ground to protect consumers and help them deal with debt.
Carolyn Cartwright, Managing Director of Money Mob Talkabout, Alice Springs.
“We welcome this development and are also pleased to see that Telstra, in addition to the remediation actions they have embarked upon to date, have formally acknowledged the damage this corporate behaviour has caused.”
Alan Gray, Financial Counsellor, Earth Garden Foundation, Broome.
“Financial counsellors have worked for three years together to see this ACCC action succeed. Today’s announcement is an important milestone but it’s not the end of our campaign.”
Peter Gartlan, Financial Counselling Australia.
“This conduct should never have happened in the first place. The ACCC has now sent a clear message to corporate Australia and other telcos, that this sort of behaviour is not on. It causes harm to individuals and families.”
“This case shows the vital role financial counsellors play in ensuring vulnerable consumers are protected from unconscionable conduct.”
“Financial Counselling Australia thanks all the financial counsellors involved in persevering with this case over a three-year period. Their work and commitment was outstanding and without them, this outcome would not have occurred.”
Toni Cork, General Manager, HK Training & Consultancy, Darwin.
“Time and time again, financial counsellors in outback towns and cities have seen clients from remote communities struggling under the weight of massive Telstra debts – sometimes up to $18,000.”
“We have made huge progress with getting these debts waived, but we fear there are more remote people who still have debts with Telcos.”
For comment please contact:
Carolyn Cartwright: Money Mob, Alice Springs 0411 419 425
Toni Cork: HKTC Financial Counselling, Darwin 0402 885 126
Alan Gray: Earth Garden Financial Counselling, Broome 0428 515254
Peter Gartlan: Financial Counselling Australia, Melbourne 0457 700 028