An Australian mobile phone company has been found in serious breach of compliance rules, with 175,000 customers to receive refunds for their insurance policies and an additional 500,000 to be contacted who may have been affected.
Australian telecommunications provider Optus has been ordered by the Australian Securities and Investments Commission (ASIC) to repay AUD$2.4 million (£1.4 million) to customers. The order comes after ASIC found Optus was in breach of several regulations regarding its insurance policies sold alongside its phone plans.
Optus initially self-reported a breach to ASIC regarding its failure to provide certain customers a product disclosure statement and a financial services guide when they purchased insurance, a mistake that continued for a number of years. Following further queries from ASIC, the regulator also found customers did not receive the promotional free month of insurance the company offered, were incorrectly charged during a rain-check period, were not provided necessary product information over the phone and in many cases issued the wrong cover for their device.
has reported ASIC has decided not to bring the matter to court, but is instead is focusing on getting customers their money back.
ASIC Deputy Chairman Peter Kell supported Optus’ efforts to compensate 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,” Kell said. “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.”
Optus has now initiated an external review into financial compliance at the company.
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