Bill shock and telco complaints finally actioned: New Telco Consumer Protection Code approved by ACMA
It has finally come to pass – telcos have a compulsory and enforceable code to govern their behaviour towards consumers. This new code is aimed at giving consumers the transparency and clarity with their telco use that has been severely lacking in the industry and which has led to bill shock, debt issues and more unfair credit listings such as credit rating defaults. We report on the new code governing telcos, the possible benefits for the future, and explain how the previous code has impacted telco customer credit files.
By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.
Telcos have by the skin of their teeth missed government regulation. The final draft of a new Telecommunications Consumer Protection Code (TCP) submitted by telco industry body the Communciations Allicance has been approved by the Australian Communications and Media Authority (ACMA) it was announced yesterday.
A couple of weeks ago we reported telcos had submitted their last version of the Code to the ACMA in the post Telco consumer code on third rewrite for June deadline.
The ACMA announced in a release to the media yesterday A Better Deal For Australian Telco Customers, that it had agreed to register the telco’s version of the Code, which is aimed at giving “long-suffering telco customers materially greater protection on the big telco issues such as bill shock, confusing mobile plans and poor complaints-handling,” the ACMA says.
A public inquiry conducted by the ACMA estimated that the annual recurring costs associated with the industry’s unsatisfactory performance under the previous code included $1.5 billion associated with consumers choosing the wrong plan, $108 million for the costs of telephone complaints and $113 million for the costs of writing off bad debts.
“The ACMA will very closely monitor its[the TCP Code’s] progress and will not hesitate to communicate to industry the need for further change, if that need arises. This is an important point as the code will apply to every service provider in Australia. Compliance with the code is no longer an option. The ACMA obviously stands ready to use its powers of investigation and enforcement if participants choose not to comply with these new code obligations (which include an obligation to report their compliance performance to the industry’s new compliance monitoring body, Communications Compliance),” Mr Chapman says.
How have telco customers been affected?
Recently the Telecommunications Industry Ombudsman (TIO) surveyed its services. It counted 52,231 new complaints about telcos received between January and March 2012. Almost two-thirds were about mobile phone services.
The TIO reports new complaints about over-commitment caused by inadequate spend controls increased to 4,282 in the January-March 2012 quarter, compared to 2,181 in the same quarter in 2011. In the same periods, new complaints about disputed internet charges increased from 981 to 2,823 (180 per cent).
“It is well known that more internet browsing and downloads are now done on mobile phones and other mobile devices. With this change in consumer behaviour, we have seen complaints about excess data charges almost treble over the last year,” Ombudsman Simon Cohen said. “The incidence of these complaints will reduce if consumers are only contracted for services they can afford, and where spend management tools such as notifications and usage meters are accurate and reliable”.
And customer credit files?
Almost 26% of MyCRA’s credit repair clientele in the past 12 months were Telco customers.
Often this was due to botched phone plans and lack of data usage monitoring. Consumers have been confused when it comes to data allowance on their smartphones, and the providers have not been helping. Often clients have claimed they have gone over their data limit really quickly, or the plan they were put on was not appropriate for what they intended to use their mobile internet for.
The problems have also extended to complaints. Many customers can have had great difficulty in cancelling the accounts or coming to a resolution with telcos over these billing issues. Sometimes consumers have reluctantly paid the bill, thought the matter was settled, only to find they were defaulted anyway, and others have just refused to pay the bill until they got some resolution. Either way, customers have been faced with at least 5 years of bad credit from these often unfair credit listings unless they have been able to make a successful complaint.
The Sydney Morning Herald yesterday reported in the story ‘Bill shock’ code set to save $1.5b on phone bills that the new 102 –page code will be enforced from September 1, and progressively phased in over the next two years.:
“[We] are hopeful that its adoption will result in clearer advertising, easier comparison of products, better information about contracts and better tools to help consumers avoid bill shock,” Teresa Corbin, CEO of the Australian Communications Consumer Action Network (ACCAN), which proposed the code told SMH.
It also reported on a significant change to data usage notification rules:
“…customers will receive warning messages when they have reached 50 per cent, 85 per cent and 100 per cent of their monthly allowance for calls, messages and data,” SMH reports.
The basic benefits are explained in more detail in the ACMA article Fair call—new telco code to benefit consumers:
Under the new code, telco providers must be clear about what they are offering in their phone plans and stop using confusing terms like ‘cap’ (unless the offer refers to a ‘hard cap’—an amount that cannot be exceeded).
Customers will also benefit from better spend management tools designed to avoid ‘bill shock’. These include improvements in billing processes and credit management, and the introduction of notifications about data usage and expenditure thresholds.
Some of the changes will be phased in to help providers adjust their systems. From 27 September, customers will be able to more easily compare costs and plans, with telcos required to provide unit pricing for national calls, standard SMS and downloading 1 MB of data in advertisements…
From 1 March2013 customers buying a new service will receive a two-page document called the ‘Critical Information Summary’. This includes essential information about service, pricing and complaints-handling, as well as volumetric information so consumers can easily understand how many two-minute calls or texts they can make under their plan.
The new code will mean faster, better complaints-handling, with urgent complaints resolved within two days. All of these new measures will be monitored and the telcos subject to new benchmarking standards.
For customers having difficulty paying their bills or meeting unexpectedly high bills, telcos must advise consumers about spend management tools, hardship advice and options to restrict a service.
A new industry compliance body is being formed to ensure all industry participants comply with the new code.
We eagerly await the September implementation of the TCP Code, and the positive impact this will have on our customer’s credit files and hopeful reduction in the number of unfair credit listings originating from telco customers.
Image 1: Danilo Rizzuti/ www.FreeDigitalPhotos.net.
Image 2: Sydney Morning Herald