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Australia's Telstra to pay $37 mln fine for mis-selling to indigenous customers

Nov 26 (Reuters) - Australia’s biggest telecom firm Telstra Corp has agreed to pay a A$50 million ($36.8 million) penalty for selling more than 100 indigenous consumers post-paid mobile products they did not understand and could not afford, the country’s competition regulator said on Thursday.

Telstra admitted to "unconscionable conduct" and breaching consumer law in signing up 108 indigenous customers at five licensed stores between January 2016 and August 2018, the Australian Competition and Consumer Commission (ACCC) said in a statement. (bit.ly/33jFDp4)

Improper sales practices by the company had caused many of the affected customers financial hardship, the ACCC said, with one consumer running up debts of more than A$19,000.

“Even though Telstra became increasingly aware of elements of the improper practices by sales staff at Telstra licensed stores over time, it failed to act quickly enough to stop it,” ACCC Chairman Rod Sims said.

Telstra did not immediately respond to Reuters’ request for further comments.

“Many of the consumers spoke English as a second or third language, had difficulties understanding Telstra’s written contracts, and many were unemployed and relied on government benefits or pensions as the primary source of their limited income. Some lived in remote areas where Telstra provided the only mobile network,” the ACCC statement added.

The news comes at a time when companies are working to repair their relationship with the indigenous community following public outcry over the destruction of sacred sites by miner Rio Tinto.

The ACCC said Telstra had agreed to provide remediation to affected consumers, improve its existing compliance program, and enhance its digital literacy program for consumers in some remote areas. ($1 = 1.3574 Australian dollars) (Reporting by Shashwat Awasthi in Bengaluru; Editing by Rashmi Aich)

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