Consumer Law
Impacted by the Optus outage? What are your legal rights and potential actions you could take?
Earlier this year Optus faced an unprecedented phone and internet outage which impacted more than 10 million customers.
Many of those customers said they wanted to leave the telco. Others were calling for compensation. Some were even considering their legal options to sue Optus.
Initially, Optus offered customers some free data to use over the holidays, to thank them for their patience during the November outage.
But many consumers have argued that their losses are worth much more. However, legally speaking, Optus might owe you nothing.
So, what rights do you have? And what are Optus’s obligations?
What rights do I have?
Under Australian consumer law, businesses must pay for “loss or damage that is caused by the failure to meet a consumer guarantee”.
However, as ever there are a few important caveats.
One is that many telco contracts may promise to provide a service, but don’t promise that service will be uninterrupted. So, a temporary outage may not technically be in breach of your contract.
The other issue is that in order to make a legal claim, a customer would need to establish that Optus failed to provide its service with “reasonable care”. And until we know what caused the outage, that may be hard to prove.
Optus says “a network event” was to blame for triggering the “cascading failure” that shut down its services across the country but has given little more detail.
Can I claim compensation anyway?
The short answer is – yes you can.
The telecommunications industry ombudsman has encouraged anyone who suffered a loss due to the outage to make a claim directly with Optus.
Here’s what you need to do:
- Keep all receipts, bills or bank statements that prove what you spent
- Work out how much compensation is needed based on the money you lost during the outage — this could include missed work, lost business, or other expenses you incurred
- Then contact Optus directly and make a claim
If you’re unhappy with Optus’s response, the ombudsman might be able to help you reach a solution. The ombudsman can direct a telco to pay you up to $100,000 in compensation for financial losses, and up to $1,500 for non-financial impacts such as unusual amounts of stress or inconvenience.
You can read more about the ombudsman’s support for customers impacted by the Optus outage here.
Some small businesses might have insurance covering interruptions, so it’s worth checking your policy just in case.
Can I cancel my Optus contract?
The short answer is – it will depend on your plan.
If you’re a prepaid or month-to-month mobile customer it’s pretty simple: you can request to transfer your number to another provider, or start afresh with a new sim and number. But if you’re on a long-term internet plan or paying off a phone, it might be a bit more complicated.
If you ask Optus for compensation, part of your claim could be cancelling your contract early without incurring a penalty. However, generally speaking, most contracts will have a clause saying you need to pay out the remainder of your contract period if you want to terminate it early.
Can I sue Optus?
For the reasons mentioned above, it might be difficult to prove your case in a court of law.
Instead, the ombudsman recommends approaching Optus directly about compensation. The ombudsman has been advising Optus to look beyond what the law requires and to do the right thing in the circumstances.
Summary
After a major phone outage, the Telecommunications Industry Ombudsman advises that customers can:
- Ask for a refund or rebate for the outage period;
- Cancel their contract without a penalty;
- Ask for compensation for any resulting loss.
For more information and expert advice, ask to speak to a lawyer at Ezra Legal on (08) 8231 6100 or email reception@ezralegal.com.au
For information on the range of commercial legal services that we provide at Ezra Legal, head to:
Julian Roffe
Practice Manager
Ezra Legal
