Australian telco fined USD39M for exploiting Indigenous folk

CANBERRA, AUSTRALIA (AP) — Australia’s largest telecommunications company Telstra was fined USD39 million yesterday for unconscionable conduct in selling remote indigenous customers mobile phone contracts that they did not understand and could not afford.

The fine ordered by a Federal Court judge is the second largest ever imposed under Australian consumer law.

Telstra admitted the offences in signing up 108 Indigenous customers, some of whom spoke English as a second or third language, to mobile phone accounts.

Staff sometimes manipulated credit assessments to say unemployed customers had jobs. They also failed to properly explain the potential costs and falsely represented products as free of cost. Justice Debra Mortimer said Telstra staff took advantage of an Indigenous cultural propensity to express agreement as a way of avoiding conflict.

The customers owed on average AUD7,400 and one owed AUD19,000. Telstra has waived the debts and refunded money.

Telstra Chief Executive Officer Andy Penn said his company was continuing to resolve the problems.

Alan Gray, based in the western Australian coastal town of Broome, was among the financial counsellors working in Outback Indigenous communities who raised the alarm. He said he hoped the fine would be a warning to others who exploit Australia’s impoverished
Indigenous minority.

A woman pushes her bicycle past a Telstra public telephone in Sydney. PHOTO: AP