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Stronger safeguards for telco consumers

5 July 2018

Telcos will be held to account for resolving consumer complaints quickly and effectively under new rules proposed by the Turnbull Government. 

Minister for Communications, Senator Mitch Fifield today released a consultation paper on proposed new rules to ensure that consumers can access an effective complaints handling and redress scheme that requires transparency and accountability of telecommunications providers.

“Consumers are fed up with poor service and inadequate safeguards when their telco fails to address a complaint,” Minister Fifield said. “Complaints about customer service and billing continue to be the top issues reported to the Telecommunications Industry Ombudsman (TIO), and complaints in Australia are far too high.”

“For example, the TIO had more than 158,000 complaints last year, compared to just over 2,000 complaints to the New Zealand Telecom Dispute Resolution service and around 9,000 complaints to the Canadian telecommunications complaints scheme. Australians are being let down by a system which isn’t working.”

Today’s announcement marks the first stage of the Government’s three-part consumer safeguards review, being led by Andrew Dyer and the Department of Communications. Mr Dyer has previously been Chairman of the TIO Council and currently serves as the National Wind Farm Commissioner, among other roles. He has significant experience in customer service, complaint handling and dispute resolution.

The existing complaints handling regime is almost totally reliant on industry self-regulation. Controls on industry behaviour are largely contained within industry codes, monitored by a regulator required to give industry every opportunity to remedy its own behaviour; and the independent TIO is owned and funded by industry.

This paper proposes a range of measures to improve complaints handling, including: 

  • Telcos will continue to have primary responsibility for dealing with complaints in line with the new regulated standards for complaints-handling enforced by the Australian Communications and Media Authority (ACMA), which must include transparent escalation processes
  • A new External Dispute Resolution body, independent of industry, should be established to deal with complex complaints. This body should have the power to compel providers to take remedial actions, which could include financial compensation and/or the ability to issue fines. 
  • The ACMA should have responsibility for collection of data relating to industry performance and complaints, and should publish reports detailing analysis of this data to better allow industry and government to resolve systemic issues. ACMA should also provide transparency of complaint levels for each telco to the market.

The consultation paper is available here http://www.communications.gov.au/consumer-safeguards-review-part-a and submissions are due by 3 August 2018.

Background on consumer safeguards
On April 17, 2018, the Government announced the terms of reference for a review into consumer safeguards in the telecommunications sector.  

The review will be undertaken in three parts:

  1. Ensuring that consumers have access to an effective complaints handling and redress scheme that provides transparency and holds telcos accountable for their performance. 
  2. Ensuring consumers have reliable telecommunications services including reasonable timeframes for connections, fault repairs and appointments; as well as potential compensation or penalties against providers.
  3. Ensuring consumers are able to make informed choices and are treated fairly by their provider in areas such as customer service, contracts, billing, credit and debt management, and switching providers.

Recommendations for all three parts of the consumer safeguards framework will be provided to Government for consideration by the end of 2018.

The Government currently has a range of consumer safeguards in place, which were implemented during an era when Telstra owned and operated the national fixed-line telecommunications network and voice services were the predominant form of communications: https://www.communications.gov.au/what-we-do/phone/phone-services/consumer-protection 

These regulated measures are complemented by the Telecommunications Consumer Protections (TCP) Code. This is a code of conduct for telco providers which provides safeguards in the areas of sales, service and contracts, billing, credit and debt management, changing suppliers, and complaint handling. It also sets out a framework of code compliance and monitoring by the ACMA. 

In addition to this review, in December 2017 the Government announced a range of new consumer protections specific to users migrating to the NBN.

Media contacts:
Geraldine Mitchell | 0407 280 476 | Geraldine.Mitchell [at] communications.gov.au
Guy Creighton | 0438 815 302 | Guy.Creighton [at] communications.gov.au