Australian telecommunications company Exetel has been fined $694,860 for failing to adhere to regulations designed to protect customers from scams. An investigation conducted by the Australian Communications and Media Authority (ACMA) revealed that Exetel breached these rules on 73 occasions during June and July 2024. Scammers exploited vulnerabilities in Exetel’s identity verification processes, enabling them to gain unauthorized control over mobile number services and access consumers’ bank accounts, leading to reported losses of at least $412,000.
The ACMA’s investigation highlighted serious lapses in Exetel’s security measures. Samantha Yorke, an ACMA member, emphasized the significant financial harm and emotional stress caused to affected individuals. “We are aware of reports of significant financial losses suffered by consumers. This kind of fraud can also lead to misuse of personal information and ongoing emotional harm connected to identity theft,” Yorke stated.
Regulatory Response and Industry Context
The financial penalty imposed on Exetel is the largest recorded to date for violations of these specific regulations. Although the company took steps to rectify the identified issues shortly after the investigation began, Yorke noted that such vulnerabilities should never have existed. “The people impacted should have been protected,” she added.
Exetel, which is part of the Superloop Group listed on the ASX since 2015, faces increased scrutiny as the telecommunications sector grapples with ongoing challenges related to consumer protection. In a related incident, fellow telco Optus admitted to engaging in unconscionable conduct, resulting in a $100 million penalty for selling customers phones and contracts that were neither wanted nor needed. The Australian Competition and Consumer Commission (ACCC) had previously sued Optus in October 2023 over these practices, which affected hundreds of vulnerable customers.
The ACMA’s findings serve as a reminder of the importance of robust safeguards in the telecommunications industry. Scams are often executed by sophisticated criminal syndicates, underscoring the need for telcos to secure their online systems effectively.
The ABC has reached out to Exetel for comments regarding the fine and the measures being implemented to prevent future breaches. As the industry evolves, the attention to customer security and the enforcement of compliance with regulations will likely remain a priority for regulatory bodies and consumers alike.
