Telstra fined $50 million for conning 108 Indigenous Australians

Since 2016, Telstra sales staff continually targeted Indigenous Australians with deceitful sales tactics to sell mobile phones and other similar contracts. Telstra targeted people who spoke English as a second, third, or fourth language and who had difficulty reading and writing. The effect of this is that often these customers did not understand Telstra’s terms and conditions.

Telstra’s staff changed the prospective customer’s details so that their system would not automatically decline the customer’s applications. For example, Telstra’s staff changed the prospective customer’s residential address, Driver Licence number, and falsely stated that they were employed. The result is that Telstra’s system could not detect the person’s bad credit history or financial circumstances.

Telstra used a number of tactics to encourage the Indigenous Australians to sign up. For instance, Telstra did not explain how the plan worked, the consequences of going over data limits, created an impression that they would receive the mobile phone for “free”, or that music streaming would be “free”. Telstra took advantage of a cultural propensity for Indigenous Australian people to express agreement as a means of avoiding conflict.

108 Indigenous Australians were conned into contracts with Telstra and some even signed up to multiple contracts in a single day. The average costs of these contracts were $322 per month and some even went up to $786 per month. The average debt the customers owed was $7,461 and ranged from $1,600 to $19,524. Given many of these customers were unemployed, this was a substantial amount of money.

Telstra was held to have breached Schedule 2, Section 21 of the Competition and Consumer Act 2010 (Cth) for ‘Unconscionable conduct in connection with goods or services’. Telstra was fined $50 million. Telstra waved the debt and refunded the customers.

Further Reading

• Case Name: Australian Competition and Consumer Commission v Telstra Corporation Limited [2021] FCA 502

• Australian Competition & Consumer Commission (ACCC): Telstra to pay $50m penalty for unconscionable sales to Indigenous consumers

• ABC: Telstra fined $50 million over unconscionable treatment of Indigenous phone plan customers

• Australian Financial Review (AFR): Telstra fined $50m for 'unconscionable' Indigenous sales

• Sydney Morning Herald: 'The worst we've seen': Telstra faces $50m penalty over 'exploitative' contracts

• The Australian: Telstra taken to court over aggressive selling

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