VIDEO: Telstra accused of selling unaffordable phone plans to Indigenous customers
ALAN GRAY, BUSH MONEY MOB: I'm heading out to visit a bunch of remote Aboriginal communities this week and every time I visit these communities, we uncover more and more cases where Telstra have ripped people off.
MICHAEL ATKIN, REPORTER: Financial counsellor Alan Gray is travelling east of Broome, to the tiny community of Pandanus Park.
ALAN GRAY: Hello bro, how are you going? I’m a money mob fella from Broome. How you going, Terrance?
MICHAEL ATKIN: For years when people here visited Telstra stores, sales staff sold them expensive phone plans they couldn’t afford.
ALAN GRAY: People are coming to see me in my office, they've got a bill for 3 grand, 5 grand, 8 grand from Telstra.
Every time I come here, people tell me they've got a sister or an auntie or an uncle who got ripped off by Telstra and we haven't found them yet.
People have gone into the Broome Telstra store to buy typically a $100 mobile phone, but a fast-talking sales staffer on high commissions but low wages has talked him into a multi-device plan.
MICHAEL ATKIN: In 2021 Telstra was prosecuted by the consumer watchdog over the mistreatment of more than 100 Indigenous customers.
FIONA PETTIFORD, ANGLICARE NT: They got severely into debt. They had bad credit listings which impacted their financial lives. They got chased by debt collectors.
MICHAEL ATKIN: Telstra paid a $50 million penalty after admitting to unconscionable conduct and agreed to refund customers with interest.
CLAIRE JOHNSTON, TELSTRA: We no longer have direct individual sales targets for our people, and we've also done a significant amount of activity in the community as well around community visits.
We have still got a lot more work that we are committed to working on.
MICHAEL ATKIN: But 7.30 has discovered the scale of Telstra’s mis-selling is much greater than first identified.
Financial counsellors have uncovered at least 550 new cases in the last two years resulting in Telstra paying $6.7 million in remediation and compensation.
ALAN GRAY: Telstra told the court that this mistreatment only happened to 108 people. That's a fantasy because our own micro agency has uncovered hundreds and hundreds of mistreated people.
MICHAEL ATKIN: Is that worrying that it still could be impacting people's financial lives so significantly?
CLAIRE JOHNSTON: Oh, absolutely and so that's why we want to identify and remediate the accounts for these customers as quickly as possible.
MICHAEL ATKIN: After Telstra’s prosecution Nyikina woman Pat Riley has come forward to claim she was mistreated.
Pat’s mobile phone was stolen in 2008 prompting Telstra to stop calls and texts, but data was still being used - resulting in bills for thousands of dollars.
PAT RILEY, TELSTRA CUSTOMER: It shocked me. I felt so depressed and stressed and worried about it because I didn't create these bills and I kept ringing Telstra and telling them to stop them, what is going on, why is my bill rising?
MICHAEL ATKIN: Telstra’s debt collectors began threatening legal action.
The single mum with four kids who lives in Pandanus Park worked multiple jobs to pay her debts.
PAT RILEY: Who is going to look after my kids behind if I end up going to court or going to jail for something that I didn't do?
MICHAEL ATKIN: In 2017, Pat Riley got into serious trouble with Telstra again, when she signed up for a new mobile phone plan in Broome.
This time she says the salesperson told her she could have a second phone for free - a lie that would come to cost her $280 a month.
When she couldn’t pay, a black mark was put on her credit rating.
PAT RILEY: It actually destroyed my whole financial side of things with getting a finance car or, you know, getting a loan from the bank. My kids couldn't get what they needed.
The debt collector started harassing me nearly every week.
MICHAEL ATKIN: Over years, Pat Riley has repaid Telstra around $30,000.
Alan Gray made a complaint to the company. After negotiations, Telstra refunded her with interest and paid $10,000 in compensation but they continue to fight for more.
ALAN GRAY: It's not enough because the harassment, the fear, the mistreatment that's gone into ruining Pat's life. This was years and years of fearing that if they didn't pay up every fortnight they might go to court or prison.
CLAIRE JOHNSTON: Michael, that's a really horrible case and $10,000 is never going to be adequate to try and cover someone's pain and suffering.
But as I said to you, we've got a framework that we use to try and be fair and equitable, but we'd be happy to work with him to review that case.
MICHAEL ATKIN: I'm on my way to see Mary Spinks who was sold an expensive phone plan she says she couldn't afford, and this was after the unconscionable conduct for which Telstra was fined $50 million.
In 2019, Mary got her phone in Perth on a $130-a-month plan. Telstra’s credit assessment said she’d been working full-time at Looma’s local store for 15 years.
MARY SPINKS, TELSTRA CUSTOMER: They are lying because I wasn't working at the shop. I didn't have a full-time income. I was on Newstart payments.
MICHAEL ATKIN: Did the sales staff involved in Mary Spink’s case manipulate the credit assessment so she would pass?
CLAIRE JOHNSTON: We don't have evidence to suggest that occurred, but we're not saying that it didn't happen.
MICHAEL ATKIN: Out of fear, Mary, a Walmajarri woman kept up with her payments at times leaving her unable to pay for food and fuel.
MARY SPINKS: I had to pay it off because I didn't want to go to debt collectors or go to jail for it.
MICHAEL ATKIN: Telstra has offered to refund her $3,500 but it’s refused to compensate her, denying any mis-selling or unconscionable conduct.
CLAIRE JOHNSTON: We believe that the latest offer that we did give Mary Spinks was fair and reasonable.
FIONA PETTIFORD: I don't believe that Telstra is following its own compensation principles when they're deciding on the compensation for particular cases.
MICHAEL ATKIN: Fiona Pettiford is based in East Arnhem Land in the Northern Territory and is calling out Telstra for playing hardball with some compensation claims, forcing her to go to the ombudsman.
In one case a woman was eventually awarded $18,000 in compensation.
FIONA PETTIFORD: Telstra only offered the client $1,500. She'd walked into the store to get a recharge on a prepaid phone, and she talked about how she felt pressured. That the salesperson made her sit on a stool and wouldn't let her leave until she'd signed some papers.
CLAIRE JOHNSTON: These are really complex cases, and every case is unique and different. We do absolutely take the customer's story on face value, and we just do our best with all of that information and try and apply it consistently to reach an outcome that's really fair for the customer.
MICHAEL ATKIN: After further questions from 7.30, Telstra revealed it has paid remediation to more than 2,300 customers since the undertaking with the ACCC but the company couldn’t confirm if all of those cases involved mis-selling.
That’s led to calls for the consumer watchdog to launch a fresh investigation.
FIONA PETTIFORD: I really think it warrants investigation and potential further penalties.
ALAN GRAY: Look at this evidence, if they agree with us, we believe that Telstra should be re-prosecuted.
PAT RILEY: Grassroots Aboriginal people, we're taking this on because they took advantage of us.
Financial counsellors say hundreds of Indigenous customers have been ripped off by Telstra selling expensive products they couldn't afford but continued to pay for fearing they'd be sent to jail.
National consumer affairs reporter Michael Atkin and Lorretta Florance have the story.