Reconciliation Australia said that, based on its own investigation, it was revoking Telstra’s “elevate” status.
It said it had “extreme concern” about Telstra’s actions but was also disappointed that “at no time did Telstra alert us to the complaints covered by the ACCC investigation.” Telstra has had its reconciliation status revoked after an investigation found it engaged in “unconscionable conduct” by selling more than 100 vulnerable Aboriginal people phone contracts they could not afford and did not understand.
The consumer watchdog, the ACCC, took Telstra to the federal court in November over its “unfair selling tactics”. Telstra staff at five stores in the Northern Territory, South Australia and Western Australia “took advantage of a substantially stronger bargaining position when selling post-paid mobile products on behalf of Telstra”, the Australian Competition and Consumer Commission said.
Many spoke English as a second or third language, had difficulties understanding Telstra’s written contracts, relied on government benefits or pensions and lived in remote areas where Telstra provided the only mobile network, the ACCC said.
In some cases, Telstra staff falsely represented that consumers were receiving products “free”. In many cases, the ACCC said, sales staff manipulated credit assessments so consumers could meet the requirements to sign up to post-paid mobile contracts.
The average debt per consumer was more than $7,400. Telstra also referred some of these customers to debt collection agencies.
“One consumer had a debt of over $19,000; another experienced extreme anxiety worrying they would go to jail if they didn’t pay; and yet another used money withdrawn from their superannuation towards paying their Telstra debt,” the ACCC chair, Rod Sims, said.
“This case exposes extremely serious conduct which exploited social, language, literacy and cultural vulnerabilities of these Indigenous consumers,” he said.
Telstra faces a possible penalty of $50m over the case.
Reconciliation Australia said that, based on its own investigation, it was revoking Telstra’s “elevate” status.
It said it had “extreme concern” about Telstra’s actions but was also disappointed that “at no time did Telstra alert us to the complaints covered by the ACCC investigation.”
“Reconciliation Australia takes our relationship with our Rap [reconciliation action plan] partners seriously and we have undertaken a considered, clear and fair process,” the national body on reconciliation in Australia said. “Our investigation concluded that Telstra has not met its own aspirations to be a leader in the reconciliation movement nor the expectations of an Elevate Rap partner.”
Telstra said it had provided full refunds including interest, waived debts and had a complaints handling system and hotline for Aboriginal customers.
“We are deeply disappointed with what has happened,” a Telstra spokesperson said. “We have work to do to rebuild relationships and trust and we are committed to a stronger future of contribution towards reconciliation.”
Reconciliation Australia said Telstra could start a Rap that addressed the concerns raised by the ACCC investigation.
Raps outline the minimum elements that organisations and companies publicly commit to and can include employment targets and sponsorship arrangements.
Of the 1.100 organisations that have signed up to the program, only 21 had an Elevate Rap, the highest status that can be achieved, including Telstra.
It is uncommon for Reconciliation Australia to revoke a Rap status. In June last year, the body revoked its endorsement of mining company Rio Tinto as a reconciliation action partner over the destruction of a 46,000-year-old Aboriginal heritage site in the Pilbara, branding it a “breathtaking breach of a respectful relationship”.
