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Australia's Telstra to pay $37m fine over sales to indigenous people

Telecom admits pushing products people didn't understand and couldn't afford

Telstra, Australia's biggest telecom company, has admitted to "unconscionable conduct" in signing up indigenous customers for mobile products that caused them financial hardship.   © Reuters

Australia's biggest telecom firm Telstra Corp said on Thursday it had agreed to pay a A$50 million ($36.8 million) penalty for selling more than 100 indigenous consumers post-paid mobile products they did not understand and could not afford.

In an e-mailed statement, Telstra admitted to "unconscionable conduct" in signing up 108 indigenous customers at five licensed stores between January 2016 and August 2018 and Chief Executive Officer Andrew Penn said he took full accountability.

"While it was a small number of licensee stores that did not do the right thing, the impact on these vulnerable customers has been significant and this is not ok," Penn said.

He added that Telstra had taken steps to remediate the affected customers, including full refunds, in addition to the proposed fine.

The news comes at a time when companies are working to repair their relationship with the indigenous community following public outcry over the destruction of sacred sites by miner Rio Tinto.

The Australian Competition and Consumer Commission (ACCC) said earlier in the day that Telstra's improper sales practices had caused many affected customers financial hardship, with one consumer running up debts of more than A$19,000. (https://bit.ly/33jFDp4)

"Even though Telstra became increasingly aware of elements of the improper practices by sales staff at Telstra licensed stores over time, it failed to act quickly enough to stop it," ACCC Chairman Rod Sims said.

The competition regulator said many of the affected customers spoke English as a second or third language, had difficulties understanding Telstra's written contracts, and many were unemployed and relied on government benefits or pensions as the primary source of their limited income.

(Reuters)

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