Following the Optus Australia refund guidelines, the telco has agreed to refund a total of more than $2.4 million to mobile phone customers after overcharging them for insurance. Optus, the second largest telecommunications company in Australia, has to refund to around 175,000 mobile customers.
The Australian Securities and Investments Commission (ASIC) reported that Optus failed to provide certain customers with a Product Disclosure Statement and a Financial Services Guide. Over the years, the consumers who bought mobile phone insurance in store or by phone got highly affected. Consequently, many customers may not have been aware of certain key features and limitations of the insurance that they procured.
The inquiries of ASIC reveal that Optus made four further breaches of the law.
- The customers did not receive one month free insurance under a promotional offer they were entitled to
- They had to pay a premium for insurance during a “raincheck” period
- The customers were not provided with the needed information before purchasing an insurance policy over the phone (e.g. information about excesses and cooling-off rights)
- Some customers received “Device Insurance” cover in place of the more favorable and less expensive “Yes Cover”
ASIC was concerned that these breaches pointed out that Optus had inadequate compliance systems and processes, such as training, monitoring and supervision of staff, reports Gizmodo.
To perform the Optus Australia refund, the company will be marking all customers who may be affected. Where the customers were overcharged, Optus will take steps to contact past customers. At the same time, Optus will compensate current customers by a direct credit to the customer’s account, which will include interest. Optus is also intending to pay amounts owing to former customers who cannot be located to a charity assisting with financial literacy.
In response to ASIC’s concerns, Optus has appointed an independent external firm. This firm will carry out a comprehensive review of its compliance functions to ensure ongoing agreement with its Australian financial services license obligations.
The steps taken by Optus is welcomed by ASIC Deputy Chairman Peter Kell, who recently commended Optus for taking such steps to compensate the customers.
“It is important that when a business is licensed by ASIC to sell financial products to retail consumers, it ensures that it does so consistently with the representations it has made to consumers, and in compliance with the financial services laws. Where consumers have suffered a detriment, it is important that remediation is undertaken, and that steps are taken to ensure that the business is operating in compliance with the relevant legal obligations.”
Under Optus Australia refund plan, the customers can get in touch with Optus on 1800 854 349 from Monday to Friday between 8am to 6pm.