Optus is on the hook for a $100 million fine after it pressured Aboriginal customers in remote regions into buying phone products they did not need or want.

The nation’s second-biggest mobile operator has admitted to engaging in “unconscionable conduct” after the Australian Competition and Consumer Commission launched court action.

“In many instances, the consumers did not want or need, could not use or could not afford what they were sold, and in some cases consumers were pursued for debts resulting from these sales,” the ACCC said on Wednesday.

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It said many vulnerable customers were among the 400-plus victims across 16 stores between August 2019 and July 2023 pressured into buying phones.

The consumer watchdog specifically pointed the finger at Optus for deceiving Indigenous Australians in regional, remote and very remote areas.

Other customers who purchased unwanted products included people with diminished cognitive capacity, unemployed, having limited financial literacy or English not being a first language.

The watchdog and Optus will jointly ask the Federal Court to impose a total penalty of $100 million for breaching consumer law, but it is up to the court to decide the final fine.

The national peak communications consumer body said the fine would represent one of the largest consumer law penalties in Australian history.

“Unconscionable conduct is a high bar and one that Optus has spectacularly surpassed in its behaviour preying on some of our most vulnerable communities and consumers, including Indigenous communities,” Australian Communications Consumer Action Network chief executive Carol Bennett said.

Optus CEO Stephen Rue said the company’s misconduct was inexcusable and unacceptable.

“I would like to sincerely apologise to all customers affected by the misconduct in some of our stores,” Rue said.

“Optus failed these customers, and the company should have acted more quickly when the misconduct was first reported.”

Examples of the misconduct also included sales staff failing to point out whether Optus even had coverage in remote areas where customers lived, failing to explain the financial obligations involved in contracts and misleading users into believing certain goods were free.

“The conduct, which included selling inappropriate, unwanted or unaffordable mobiles and phone plans to people who are vulnerable or experiencing disadvantage, is simply unacceptable,” commission deputy chair Catriona Lowe said.

“Many of these consumers who were vulnerable or experiencing disadvantage also experienced significant financial harm.”

Lowe said the commission was particularly concerned Optus used debt collectors to pursue some customers after it had launched internal investigations into the sales conduct.

She noted the telco’s actions caused “significant emotional distress and fear”.

Financial counsellors said the case was further proof the telco sector needed stronger, enforceable regulation.

“Fines are important, but what we really need is structural reform and genuine cultural safety built into how businesses engage with First Nations communities,” Financial Counselling Australia’s First Nations policy director Lynda Edwards said.