Why Telstra is going to pay a record $600m fine for fraud – Reuters

Telstra has paid $600 million to settle federal fraud and marketing charges related to the sale of defective devices to consumers.

The telco’s chief executive officer, David Thodey, told Reuters that the fine was the largest ever for fraud by a telco.

The telcos’ board will decide how to use the funds, he said.

Telstra was fined $60 million by the Federal Trade Commission last year after pleading guilty to conspiring to mislead consumers about the quality of devices they purchased from it.

Telstra’s alleged scheme to mislead the public on its products led to the largest antitrust charges in the history of the US.

The telco admitted to buying devices from a third party that the company was aware were faulty, but it failed to inform consumers and did not inform them of its own defects.

Telstra said it would have paid the full amount had the court not ruled in its favour.

It was seeking $3.2 billion in restitution, a $500 million penalty and a $1.3 billion civil penalty.

Telco’s $600M fine will help the company get back on its feet, but the settlement has been greeted with criticism by consumer groups and consumer groups said it had little impact on the company’s bottom line.

Telus, Australia’s biggest telecoms operator, also said it was pleased with the resolution.

“This settlement resolves Telstra’s longstanding, decades-long dispute with the FTC over alleged deceptive conduct by Telstra, which it has been fighting for many years,” the telco said in a statement.

“We look forward to working with regulators and consumers to ensure that the telcos continue to build on its long track record of compliance and integrity.”

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