#AceNewsReport – Apr.01: According to evidence before the court, the conduct continued even after an internal report found problems with sales to Indigenous consumers:
Telstra sales staff coached on how to manipulate credit checks, exploited Indigenous Australians, court hears: ‘While Telstra said it became “progressively aware of the issues”, the Federal Court heard that sales commissions were clawed back but debt waivers for affected customers took more than a year to be considered in some cases’
updated 3h ago
As part of the credit manipulation process, Telstra staff listed one customer’s employer as Centrelink, even though the customer was receiving Centrelink benefits and did not actually work there.
The telco reached an agreement with the Australian Competition and Consumer Commission (ACCC) after the watchdog completed an 18-month investigation into Telstra’s conduct.
The Federal Court is deciding whether the orders sought are appropriate.
If imposed by the court, the penalties would be the second-highest ever imposed under Australian consumer law.
Chased by debt collectors
The court heard one middle-aged woman, who spoke English as a second language and was living on a disability pension and caring for multiple children, was sold three separate contracts at once, collectively worth a minimum of $450 a month.
Within five months, she owed Telstra more than $12,500, including data charges.
The woman’s service was disconnected and the debt was passed on to third-party debt collectors, despite Telstra being told by a financial counsellor that the woman was homeless in October 2018.
In February 2019, the debt was waived, the consumer was refunded $14,000 and allowed to keep the devices after the Telecommunications Industry Ombudsman got involved.
The court heard Telstra had to claw back tens of thousands of dollars in incentives paid to staff over five stores, who had received commissions to hit sales targets.
Some of those targets were achieved by staff selling post-paid plans to Indigenous Australians who could not afford them.
Telstra’s chief risk office (CRO) first identified problems with sales practices in the Casuarina store in December 2017, but the court heard the mis-selling continued on a further 12 occasions.
But Telstra’s lawyer said that the CRO did not have the full picture of what was happening at the store at the time.
Telstra agreed that the plans were sold to members of the community who spoke English as a second, third or fourth language, had trouble reading or writing, and whose only form of income was welfare.
The customers were not told that the contracts included the potential for unlimited data charges and were falsely given the impression some products would be included for free.
Justice Debra Mortimer sought to clarify whether any staff involved had been sacked, but neither Telstra nor the ACCC could provide an answer.
The court heard 108 customers across five stores in Darwin, Alice Springs, Broome, and Arndale in Adelaide were affected by the practices.
Telstra’s lawyer said the full extent of the complaints, including 48 complaints from Casuarina, was not immediately identified.
“In a responsible way we have cooperated to put the agreed facts in front of the court,” Telstra’s barrister Neil Young QC told the court.
“Our cooperation has extended to the fact we have already implemented full remediation.”
He said those measures, which included the introduction of a hotline, staff training, and the appointment of two Indigenous officers, were estimated to have cost $12 million.
The measures were the result of an enforceable undertaking brokered by the ACCC and Telstra’s lawyers and presented to the court.
Justice Mortimer has reserved her decision on the penalty until a date yet to be determined.
On Tuesday, Reconciliation Australia revoked Telstra’s Elevate Reconciliation Action Plan in response to the company’s conduct mis-selling plans to Indigenous customers.
“The business practices uncovered through the ACCC investigation are deeply troubling,” the organisation said in a statement.
“Reconciliation Australia expressed to Telstra extreme concern about both the impact of the individual business practices on vulnerable Indigenous consumers and the failure to respond quickly to address the problem.”
#AceNewsDesk report ………..Published: Apr.01: 2021:
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