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Compensation for lost income

Optus did some significant software programming error that resulted in 6 weeks of phone disruption in our business in the later half of 2018.  They admitted to causing the error. Our company was onto the case from day one and we were passed around from one entity to another, as no one could pinpoint the problem. As we are a medical clinic, it greatly impacted our business and our profit was significantly down for the 6 weeks. It was a frustrating and agonising 6 weeks.

 

We were asked by the Optus compensation team to prepare many financial documents detailing our loss, which we did with the help of our accountant. This include the BAS statements, profit and loss statement from last year, of the same period that we were affected in 2018, for comparison.

 

We were shocked to receive the response from the Optus corporate counsel today stating that we are NOT entitled to a compensation, supposedly due to a legal loophole embedded in the footnote of our Optus contract.

Below is the exact wordings from Optus lawyer (we changed the name of our company to XYZ for anonymity).

 

In terms of the alleged losses and expenses incurred by XYZ, we note that cl 13.2(f) of the ‘Small and Medium Business Terms’ (“SMB Terms,” attached for your convenience) as applicable to XYZ states that “other than to your statutory rights as a consumer, Optus is not liable to you for any consequential losses you suffer, or for any costs, expenses, loss or charges that you incur.” As loss of profits falls within the definition of ‘consequential loss’ under s 16.1 of the SMB Terms, Optus is not liable for any lost profits incurred by XYZ, nor any other costs or charges incurred by XYZ as per cl 13.2(f).
The scope of Optus’ liability to XYZ is set out under cls 13.2(b)(iv) and 13.2(d)(ii) of the SMB Terms. In summary, Optus’ liability in the event of any interruptions to any use of Optus services is limited to a refund or rebate for the period of the interruption, in line with XYZ's statutory rights as a consumer which entitle Optus (at its option) to either re-supply the services, or pay the cost of having those services re-supplied.

 

Optus compensated by not charging us the phone bill for the 6 weeks, however our total loss, in the 6 weeks was far greater than 6 weeks of phone bill. We have 7 doctors and there were great difficulty of our existing patients (let alone new patients) calling us to make appointment, in whole 6 weeks, causing signicant angst amongst patients and staff.

 

We seriously do not think Optus 's reply is fair.

 

How do we go about escalating this ?

 

We have already contacted the Telecommunication ombudsman 2-3 months ago. Should we contact the ombudsman again?

 

I am thinking of bringing this to the attention of the media. Do you think the major News channels would be interested?

 

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Re: Compensation for lost income

Okay, the terms they’ve quoted a pretty clear. Yes your doctors phone may not have worked, and they can divert the landline to a mobile to keep you going.

 

however, unless your contract has a service level agreement in place that stipulates the uptime, response times and rectification times then your services fall under the generic terms for small business. It isn’t “fair”, but it is law. This is a case of making sure you read the fine print. Whilst I understand your shock, there was no promise of any compensation in the beginning right? They said they’d look into your request, it could also be that the amount you are claiming far exceeds fair and reasonable, but again without both sides of the story, it’s only hazarding a guess. 

 

The TIO aren’t there to force Optus to pay out $10000s of dollars in “lost profit”, they are an advocacy service to assist in the resolution of concerns and complaints so please don’t go in expecting an immediate cash payout. 

 

Taking it to the media is a choice you can make, as is legal recourse avenues. But I would check with your legal counsel before doing so, to ensure you aren’t burning more money unnecessarily.

I'm a Yes-Crowd Contributor, not an Optus Employee, and I contribute on a voluntary basis. Did someone on Yes Crowd answer your question? Did they share a great tip Please remember to acknowledge their awesomeness by throwing a Kudo and or Accepted Solution their way.
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Re: Compensation for lost income

Hi @Top38,

 

Sounds like a pretty fraught period. Optus stiffed up, admitted it, but you pay the price. 

 

First up I hope you are reviewing your communications backups. Data and Voice. Most businesses don't realise how reliant they are on them until they disappear. Not sure what options are out there but the ability to divert numbers etc. to mobiles on different networks etc. must be available?

 

As @Jeneral__Pain says, the contractual obligations of Optus (essentially their warranty) are agreed when you sign up and most companies always look to minimise paying for any additional expenses created when their product fails. I'd also agree with @Jeneral__Pain that the TIO is largely concerned with ensuring that Optus has fulfilled its contractual obligations (which in this case it appears to have done) so while its probably worth seeing if they can't prod Optus into something more its not likely IMO.

 

That said, you do have a much better chance of compensation outside of the contract. You'll note that in several cases Optus refer to "other than to your statutory rights as a consumer". This is because these rights cannot be nullified by any wording of any contract and Optus can't even imply that they may. They're also pretty powerful rights and include the right to be compensated for reasonable forseeable collateral loss. (For example when a TV wall mount falls and your TV gets smashed, you are entitled to claim the replacement cost of both the mount and the TV).

 

These laws are uniform around Australia and apply to products and services. What you describe would apply as a "major" failure in the Optus service and its helpfull that Optus have already agreed that they were at fault in the matter. You seem to have done the hard work tabulating the loss incurred so you can now right some formal letters to Optus making a claim under your Statutory Consumer Rights (stronger case) rather than the Contractual Rights (Weaker Case) 

 

Have a read around the ACCC site for helpful info.

 

Good Luck (and if you're successful let us know)

 

Peter Gillespie

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Re: Compensation for lost income

Hello,

 

I have a similar problem, was promised the earth from Optus who it seems could not deliver and I was released from my contracts with them.

I had no phones or internet service and lost a substantial amount of money, which was substantiated through the ATO and my profit and loss statements. The profit and loss statements were for the period during the issues, the same period for 2 years previous. I had intermittent services from Dec 21st 2017 to June 30th 2018. I had to organize my own diversions, I let Optus know about this and the diversion I had in place would only receive Optus incoming calls as Optus had failed to let the intercarrier know about the diversion. (another fail) Optus failed to provide me with the service that was promised to me and therefore offered me compensation which was  1/3 of what I had lost. I declined and was told by the person that offered me the compensation that should my claim go to Optus's Legal team"" they would crush me" (gobsmacked to say the least). I requested the full history of my conversation with Optus and have them safely in my email. I know every employee at Optus that I have dealt with, first and last names. I am waiting on an outcome between TIO and Optus and if that fails I will hand everything over to my Solicitor and contact the media in the process. Optus you should be ashamed.

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