Optus Insurance Services is set to refund about $2.4 million to about 175,000 Optus mobile customers after failing to properly inform them of the type of insurance purchased.
ASIC said the telco reported a breach about its failure to provide certain customers with a Product Disclosure Statement and Financial Services Guide.
As a result, customers may not have been aware of certain key features and limitations of the insurance they purchased.
Optus will also be writing to about 500,000 past and present customers who may be affected.
The breach impacted customers who bought mobile phone insurance in store or by phone that occurred throughout a number of years.
Optus also reported four other breaches including where customers didn’t receive one month free insurance under a promotional offer they were entitled to; were incorrectly changed a premium for insurance during a ‘rain-check’ period; were not provided with the required information before purchasing an insurance policy over the phone; and were issued the wrong cover where some customers received the ‘device insurance’ cover instead of the more favourable and less expensive ‘Yes Cover.’
In response to ASIC’s concerns, Optus has also appointed an external firm to conduct a comprehensive review of its compliance functions to ensure ongoing compliance with its Australian financial services license obligations.
“Where consumers have suffered a detriment, it is important that remediation is undertaken, and that steps are taken to ensure that the business is operating in compliance with the relevant legal obligations,” ASIC deputy chairman, Peter Kell, said.