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Telco industry slapped with new consumer rules

Watchdog to stamp out bill shock and shonky tactics

Internet Security Threat Report 2014

The long-awaited telecommunications consumer protection (TCP) code, designed to push Australian telcos to clean up their terrible track record, has been adopted by the Australian Communications and Media Authority.

The regulatory authority’s recent inquiry into telcos' customer service found that annual recurring costs associated with the industry’s unsatisfactory performance totalled around $AU1.5 billion from consumers choosing the wrong plan, $AU108 million for the costs of telephone complaints, and $AU113 million for the costs of writing off bad debts.

The new code is expected to significantly reduce these costs and lift the telco industry’s lagging game.

ACMA chairman Chris Chapman said that the industry watchdog would closely monitor the new code’s progress and will not hesitate to communicate to industry the need for further change, if it is not working.

“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,” he said.

The new 102-page code will take effect on 1 September. Among the consumer protection measures against bill shock 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.

The use of the term "cap" and other misleading terms will also be banned unless plans have a definitive limit that cannot be exceeded. Service providers will also need to provide a "Critical Information Summary", to consumers that details pricing and minimum spend data for all products.

The measures will put pressure on telco’s billing systems and compliance, but will be monitored by ACMA and a new body called Communications Compliance. Industry veteran and former high profile Telstra executive Deirdre Mason has been named Independent Chair of Communications Compliance, the new company newly created to foster and monitor industry-wide compliance with the TCP Code.

Mason will join former Federal Minister for Communications, Michael Lee, who another Director appointed to Communications Compliance (CC) by the Board of Communications Alliance. A third directorship is yet to be filled.

“Communications Compliance fills a vital gap in the co-regulatory framework – that of a strong independent body to verify that service providers nationwide are complying with the comprehensive and expanded set of consumer protections enshrined in the revised TCP Code,” said Communications Alliance CEO John Stanton. ®

Internet Security Threat Report 2014

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