Optus to compensate customers after regulatory probe

Australia’s Optus has been ordered to pay around A$2.4 million ($1.8 million) in compensation to mobile customers after an investigation found that some users were overcharged or mislead while signing up for mobile phone insurance.

Regulator Australian Securities and Investments Commission (ASIC) has instructed Optus to refund around 175,000 Optus mobile customers and write to around 500,000 customers who may have been affected.

Optus self-reported breaches including a failure to provide some mobile insurance customers with a required product disclosure statement and financial services guide, which may have prevented many customers from being aware of key features and limitations of the insurance they purchase.

The operator also disclosed that some customers did not receive the one month free insurance they were entitled to under a promotional offer, were incorrectly charged a premium during a rain-check period and in some cases were issued the wrong cover.

Inadequate training, monitoring and supervision of staff were some of the factors to blame for the oversights, the investigation showed.

Optus will pay compensation including interest in the form of direct credit to customers’ accounts. The operator is also proposing to donate the compensation owing to former customers who cannot be located to a charity aiding with financial literacy.

Optus has also taken steps to address the cause of the issue, including providing additional training for sales staff and appointing an independent company to conduct a thorough review of its regulatory compliance functions.