Telstra slammed after 21 Indigenous Australians left $90,000 in debt
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Telstra slammed after 21 Indigenous Australians left $90,000 in debt

Telstra has been criticised by a consumer group after more than 20 Indigenous Australians were left with a total of $90,000 in debt when sales staff at one of its branded retail outlets in Western Australia sold them plans they could not afford.

This year, the Australian Communications Consumer Action Network was contacted by a financial planner, who was helping 21 people, many on government benefits, that had been sold policies they could not afford by a Telstra-branded retail store in Broome. In some cases, they could not even receive mobile service where they lived.

A consumer advocacy group says remote Indigenous Australians were left thousands of dollars in debt after a store sold them plans they could ill-afford.

A consumer advocacy group says remote Indigenous Australians were left thousands of dollars in debt after a store sold them plans they could ill-afford.Credit:James Davies

ACCAN director of policy Una Lawrence said the issue was "systemic", with almost 70 cases on the books of vulnerable, remote Australians being sold plans they can't afford by different telecommunications companies. More recently, this includes customers in the APY Lands in northern South Australia, in areas that have only recently obtained mobile coverage.

"It's unconscionable. [Telcos] seem to have a one-size-fits-all approach for selling ... that is inappropriate for vulnerable consumers," Ms Lawrence told Fairfax Media.

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"These are often people with poor literacy, without English as a first language or with a different cultural approach and this isn't sufficiently taken into consideration," she said. "Some of them don't understand what excess data charges are."

She also warned against a "quick check on the computer" for a credit rating as the financial assessment undertaken by sales staff, describing it as "inadequate".

"These are not easy issues. This group of people is being treated very poorly, we need a more sensitive and nuanced approach that inquires a bit further," she said.

A Telstra spokesman said its monitoring processes earlier this year led to the "identification of potential concerns with sales activities at our Broome Store" and after a review of the practices, two employees were dismissed for not following processes.

"We have apologised to the customers affected and waived the fees and charges relating to their services," the spokesman said, describing it as "disappointing".

ACCAN is hoping these “horrific cases of overselling to vulnerable consumers” and "pushy sales tactics" from telcos will be dealt with in a current review of the telecommunications consumer protection code, saying there are some issues of "interpretation" in the existing code.

A separate submission, from the Consumer Action Law Centre (CALC) and Melbourne-based Westjustice, warned target- and commission-based selling “creates perverse incentives and puts profit before good consumer outcomes”.

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In one case described in the joint submission, provided to Fairfax Media, a woman was cold-called for a phone plan upgrade while she was in a psychiatric ward and on medication. When she later realised she had consented to the change, she told her telco about the situation but they would not cancel the plan.

Another young woman, from a refugee background on a single parenting pension, went to an unnamed telco to get a phone. She was upsold a product she could not afford, despite telling the sales representative she didn’t work and lived in government housing.

The woman ended up behind on her payments, facing a bill of more than $4000 to cover both contract prices and termination charges, and having a black mark on her credit report.

'Grossly irresponsible'

CALC and Westjustice said some providers had been "grossly irresponsible" by selling post-paid contracts to customers without ensuring they can afford the expense. The groups recommended “unsolicited” sales be prohibited or that customers “opt in” at the end of the cooling off period.

A Legal Aid NSW submission warned sales representatives "often do not use interpreters" when speaking with customers when the customer has limited English skills, resulting in plans that do not meet their needs.

Communications Alliance chief executive officer John Stanton said there had been a “large volume of feedback” on the code, noting the draft code has stronger rules for service providers to be fair and transparent, requires training for staff regarding vulnerable customers, and outlines rules regarding credit assessment.

A working group, including consumer representatives, is set to meet next week.