Optus Insurance Services Pty Ltd (Optus) will refund approximately $2.4 million to around 175,000 Optus mobile customers in response to The Australian Securities & Investments Commission’s (ASIC) concerns about its compliance with Australian financial services laws. These concerns arose after Optus, one of the largest telecommunications company in Australia, self-reported a breach regarding its failure to provide certain customers who purchased mobile phone insurance with a Product Disclosure Statement and a Financial Services Guide. This breach occurred over a number of years.
In addition, following ASIC inquiries, Optus self-reported four further breaches where their customers:
- did not receive one month free insurance under a promotional offer they were entitled to;
- were incorrectly charged a premium for insurance during a ‘rain-check’ period;
- were not provided with the required information (e.g. excesses and cooling-off rights) before purchasing an insurance policy over the telephone; and
- were issued the wrong cover.
These breaches raised concerns with ASIC that Optus had inadequate compliance and monitoring systems (e.g. in respect of training, monitoring and supervising staff).
Optus is addressing ASIC’s concerns by:
- writing to all customers who may have been affected (which is approximately 500,000 customers);
- where overcharging has occurred, Optus will take steps to contact past customers and will compensate current customers by direct credit to that customer’s account, with compensation including interest; and
- appointing an independent external firm to conduct a comprehensive review of Optus’ compliance functions.
These circumstances show the importance of having adequate compliance and monitoring systems in place.