Australian telecommunications provider Exetel has been fined $694,860 for multiple breaches of regulations designed to protect customers from scams. The Australian Communications and Media Authority (ACMA) conducted an investigation that revealed the company failed to comply with identity verification processes on 73 occasions during June and July 2024. As a result, scammers exploited vulnerabilities in Exetel’s systems to gain control of mobile services and access customers’ bank accounts, leading to reported losses exceeding $412,000.
Investigation Findings and Consequences
ACMA member Samantha Yorke expressed concern over the serious financial harm and stress caused to consumers due to Exetel’s lapses. “We are aware of reports of significant financial losses suffered by consumers,” she stated. “This kind of fraud can also lead to misuse of personal information and ongoing emotional harm connected to identity theft.”
Despite Exetel’s actions to rectify the issues shortly after they were identified, Yorke emphasized that such vulnerabilities should never have existed. She urged telecommunications companies to ensure their online portals are secure against potential criminal activities. “These scams are often perpetrated by sophisticated criminal syndicates, and telcos must ensure their online portals and forms are secure and cannot be compromised,” she added.
The penalty imposed on Exetel marks the largest fine to date for violations of these protective rules, highlighting the increasing scrutiny on telecommunications firms in safeguarding customer data.
Industry Context and Comparisons
Exetel is part of the Superloop Group, which has been publicly listed on the ASX since 2015. The company is not alone in facing regulatory challenges. In a related case, fellow telecommunications company Optus recently admitted to engaging in unconscionable conduct, resulting in a $100 million penalty for selling customers phones and contracts that they did not want or need. This admission follows a lawsuit filed against Optus by the Australian Competition and Consumer Commission (ACCC) in October 2022, which alleged that hundreds of vulnerable customers were negatively impacted by their practices.
As the telecommunications industry grapples with regulatory compliance and consumer protection, the significant fines levied against companies like Exetel and Optus underscore the critical need for robust security measures. The ACMA’s recent actions serve as a reminder that protecting consumer interests remains a top priority for regulatory bodies in Australia.
The ABC has reached out to Exetel for comment regarding the fine and its implications for the company’s future operations.
