Telstra customers were overcharged over $30 million on global roaming charges between 2006 and 2012 – and under the new Telecommunications Consumer Protection Code (TCP Code), the telco giant has been issued a formal warning from the Australian Communications and Media Authority rather than a fine.  Is the TCP Code effective in asserting real power over telcos? This is an issue we have been and will be watching closely, as it is of great importance to many of our credit repair clients. We examine this case in detail.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair and www.fixmybadcredit.com.au.

Customer complaints about telcos are astoundingly voluminous – with recent statistics showing there were 22,918 mobile complaints to the Telecommunications Industry Ombudsman in the January-March 2013 quarter alone.

The TCP Code, overseen by the ACMA was devised in order to encourage better behaviour amongst Australian telcos who were doing pretty poorly in many areas according to the ACMA’s report into their extensive telco inquiry, Reconnecting the Customer.

Since the new TCP Code was registered in September 2012, the ACMA has been checking the compliance of telco providers with key new consumer protections – including new advertising rules, the requirement for Critical Information Statements and the requirement for providers to submit their own compliance assessments to industry body Communications Compliance.

The ACMA reports it has:

Made over 330 inquiries with providers about TCP compliance issues

Issued 8 Formal Warnings and

Given 3 Directions to Comply.

The Telstra case is a significant example. The case in a nutshell, was reported by Adam Turner for Brisbane Times:

Australian Communications and Media Authority has let Telstra off with a warning after the telco waited three years to investigate a billing error through which Australians travelling abroad were overcharged by about $30 million for services. About 260,000 customers were affected by the error between 2006 and 2012, caused by incorrect data-usage details being passed to Telstra by a data-clearing warehouse used by international carriers. As a result, some Telstra customers paid the 50¢ flagfall fee more than once each time they used mobile data on their phones while travelling.

Customers raised concerns in 2009 but Telstra failed to investigate the problem until 2012, when it reported it to the ACMA.

The ACMA report found Telstra in breach of the Telecommunications Consumer Protection Code, as the global roaming billing errors after 2009 were attributable to the telco’s failure to investigate the problem.

ACMA found Telstra in breach of the consumer code, but it has the power to issue only a warning rather than a fine.

Some have argued after the final TCP Code was approved by the ACMA, the end result was a fairly watered down Code with no ‘teeth’ to exert real penalties for breaches. In addition, the Australian Communications Consumer Action Network (ACCAN) issued a statement in July criticising the ACMA for not penalising telcos who breach the code.

“The ACMA investigation shows telcos are in breach of the TCP Code on a daily basis,” an ACCAN spokesman said.

“We are encouraged to see the ACMA investigating these breaches. However, the regulator’s unwillingness to hand down even the most basic available penalty for confirmed breaches has the potential to create a culture of poor compliance.”

This may pan out to be largely right, but this Telstra case may not be the one to base that judgement on. The ACMA went into detail in a release to the media about why it chose to only warn the telco:

The ACMA’s decision on this occasion to formally warn Telstra for the breach took into account the facts that Telstra was not the original cause of the problem; that this was the first time a billing issue of this nature had been investigated under the TCP Code; that Telstra itself reported the matter; and that Telstra appears to be otherwise currently compliant with the relevant parts of the TCP Code 2012. Importantly, Telstra proactively implemented a comprehensive program of compensation that mitigated the harm for affected customers.

However, it does highlight the culture of difficulty when it comes to customer complaints which was so evident from the ACMA’s original investigation into the behaviour of Australian telcos across the board, and which has been an issue amongst our telco credit repair customers.

ACMA chairman Chris Chapman said in his statement to the media the situation highlights the need for telcos to take customer complaints more seriously.

”Our investigation makes it very clear that all telcos need to listen to their customers who report billing problems and be vigilant about any potential issues with the information provided to them by third parties,” he says.

The ACMA’s focus over the next quarter will be on checking compliance with the new requirement that telco providers notify customers on included value plans when they have used 50%, 85% and 100% of their included allowance. This was another major complaint coming out of the ACMA’s Reconnecting the Customer report and one which has also impacted the credit files of telco customers.

We will be watching really closely how this pans out, and reporting on the positive and negative ramifications for consumers and their credit files.

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