The Guardian • Issue #1962


Telstra fined for unsavoury practices

  • The Guardian
  • Issue #1962

Stunningly, but not surprisingly, Australia has found more ways to exploit Indigenous people. Two weeks ago, the Federal Court ordered Telstra to pay a penalty of $50mil plus costs “for its treatment of Indigenous customers in rural and remote parts of Australia” (ABC). The court heard how Telstra had acted “unconscionably” towards 108 customers by selling them phone plans they could not afford or did not understand their terms.

The court found that sales staff at the five stores in South Australia, Western Australia, and in the Northern Territory engaged in “exploitative” practices between January 2016 and August 2018. Telstra employees would upsell Indigenous people who had come in to purchase a cheap phone or have their existing one repaired.

The fine is the second-largest penalty ever imposed on a company for breaking Australian Consumer law.

Australian Competition and Consumer Commission chair Rod Sims said Telstra’s behaviour was “truly beyond conscience,” noting the fine was appropriate.

In fact, the evidence was so damning that Telstra itself has admitted to behaving “unconscionably.” After the ruling, Telstra chief executive Andy Penn stated that he was “deeply and personally disappointed” and that the company “should have picked this up earlier.”

It is a fitting penalty given how many lives Telstra has affected through its actions. Caitlyn Roe, a young mother of two, was one of the 108 customers that Telstra mistreated. Roe was convinced at a Telstra store to exchange her pre-paid phone for a plan. Within months, her plan transformed into a $2,200 bill and when she attempted to negotiate a payment plan with Telstra, she was unsuccessful.

“They wanted that full amount – right or wrong, they wanted it,” Roe told the ABC.

As a result of the large bill, Roe had trouble paying for food and other bills.

It is important to reflect on the seriousness of this ruling. Unconscionability is a technical legal term. When a court finds that something was “unconscionable”, this isn’t just an empty, moral judgment. It is a legal term that goes beyond simple unfairness – it is conduct against the conscience or norms of our society. Finding that conduct is unconscionable allows courts to award damages. For this reason, it is a very high bar and hard to prove.

Whether or not the penalty could have been harsher can be debated ad nauseam. The reality is we need better regulations and rules to prevent these kinds of practices by these major corporations from happening. We must remember Telstra being caught out is the exception, not the rule. However, if there is little infrastructure in place (e.g. a more extensive, nationalised telecommunications network allowing for better coverage), people in remote communities will continue to be exploited. We must fight for rural and remote communities not only to have better access to telecommunications but healthcare, education, and jobs. Providing these communities with services on an equitable basis to those in our cities will help end the systemic and intergenerational poverty.

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