The insurance arm of Optus will refund 175,000 mobile customers $2.4 million after it by failed to comply with Australian financial services laws.
The telco self-reported the breach to the Australian Securities and Investments Commission (ASIC), which affected customers buying mobile phone insurance in store or by telephone over a number of years.
Optus Insurance Services failed to give some customers a product disclosure statement and financial services guide to explain the insurance, leaving them unaware of the features and limitations of the insurance, ASIC said.
Up to 500,000 may be affected and Optus will write to them, compensating current customers by a direct credit that includes interest and reimbursing former customers. The telco also plans proposing any money owed to people who can’t be found to a charity dealing in financial literacy.
The corporate watchdog investigated and Optus reported additional breaches, including customers who missed out on a month’s free insurance offered as a promotion, and others charged premiums during a “rain-check” period. Others received the wrong cover, which was less favourable and more expensive than “Yes cover”.
ASIC deputy chairman Peter Kell said his organisation was concerned that Optus had inadequate compliance systems and processes.
“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,” he said. Optus has asked an independent external firm to review of its compliance functions.
Anyone who bought mobile phone insurance from Optus and thinks this happened to them should contact Optus on 1800 854 349.
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