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Optus Slapped With $6.4 Million Fine After Misleading Customers

Optus will pay millions of dollars in penalties after it was found to have deliberately misled customers over its National Broadband Network service, but the telco claims it was all a terrible accident.

Optus emailed 134,988 mobile customers on May 24, 2018 claiming their existing home internet services -- which were provided by the company's competitors -- would be disconnected "very soon".

Optus urged these customers to switch to Optus NBN Broadband "before it's too late".

The Federal Court found the statements in the email were misleading, as the customers contacted were not facing immediate broadband disconnection.

The Australian Competition and Consumer Commission (ACCC) said it took  Optus to court at a time when the NBN rollout will soon be complete and customers are starting to make decisions about which provider to choose.

Optus was found to mislead customers. Image: Getty Images.

“The industry should be helping consumers during this process, not providing them with misleading information. We are continuing to watch this area closely," ACCC Chair Rod Sims said in a statement on Monday.

“We took this case against Optus because we were concerned its emails created a false sense of urgency for consumers and may have discouraged them from shopping around for the best deal available."

National

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But Optus claims the email was sent "mistakenly" and said customers who received the email have already been offered assistance.

"Friday’s Federal Court proceedings and the orders handed down bring closure on an action originally brought by the ACCC in June 2019 regarding a marketing email mistakenly sent to customers in May 2018 about the disconnection of their broadband service," an Optus spokesperson said in a statement obtained by 10 daily.

"Optus co-operated with the ACCC throughout this process and we reaffirm our apology to customers who received the mistaken communication in 2018. We have already offered a costless exit for those customers who took up the offer."

Optus has been ordered by the Federal Court to pay $6.4 million in penalties for making misleading claims. The ACCC hopes the large fine will work to deter other telecom companies from also misleading customers.

More than 1.1 million broadband customers use Optus NBN.

Optus is Australia's second-largest telecommunications company, with a 30 percent share in the overall market.

Contact Siobhan at skenna@networkten.com.au