Last week the communications regulator, the Australian Communications and Media Authority, announced the registration of a new version of the Telecommunications Consumer Protections Code.

What does this mean for telecommunications consumers?

The Code is important because it contains rules that govern the life cycle of the customer’s relationship with their telco. From the telco’s advertising, to sales and contract/service agreements, through to customer service and billing, and switching telcos. It also covers rules about what telcos have to do to if customers have difficulty paying their bills, how they handle credit and debt management, and financial hardship.

The Code has been around since 2007, and this is its second major revision.

What are the new Code rules?

Major changes in this version of the Code are:

Small businesses and not for profits

  • More small businesses and not for profits will be protected by the Code, because the annual expenditure threshold for small businesses and not for profits covered by the Code has been increased from $20,000 to $40,000. This takes effect from 1 January 2020.

For people with disability

  • Existing telco websites need to ‘have regard’ to the latest version of the Web Content Accessibility Guidelines (WCAG), and new websites ‘must’ comply with the most recent version. It is not clear what distinguishes a new website from an existing website, because enhancements and amendments to existing websites fall into the ‘have regard’ category.

Staff training

  • Rules about staff training have been tightened up, now requiring staff to be trained about Code obligations they need to work with. Telcos need to have up to date systems and processes in place to support Code obligationsAll staff dealing with customers need to be fair, polite and accurate.

Disadvantaged and vulnerable consumers

  • Telcos must ‘have regard to’ the ACCC Compliance Guide ‘Don’t take advantage of disadvantage’ when complying with all Code rules, but in debt collection activities they must comply with the ACCC Guide. 
  • Staff must be able to interact with disadvantaged and vulnerable consumers appropriately.

Sales practices

  • Sales staff must sell products and services in a fair, transparent, responsible and accurate way to help consumers make informed decisions
  • Telcos must train sales staff so they can help customers understand what they are purchasing.

Complaints reporting

  • The 10 most complained about telcos to the TIO in the previous financial year need to participate in Communications Alliance’s Complaints in Context Reporting for a year (i.e. TIO complaints by services in operation for each provider). Previously participation was voluntary, with five telcos contributing (Telstra, Optus, Vodafone, Pivotel and Amaysim).

Third party charges

  • Telcos need to resolve their customers’ complaints about third party charges. Third party charges are for services provided by another company, charged by the telco to a customer’s account. Examples are 19x voting services; 19x charity donation services; games subscription services; chat service subscriptions (like Air G).

Credit assessments at point of sale

Rules about when a telco needs to do a credit assessment to confirm a consumer can pay for the service and products purchased on a plan have been updated, but are qualified. Now the minimum requirements are:

  • If a small business, not for profit or residential consumer buys a post-paid service on a plan that is longer than one month (ie: not a month by month service), the telco needs to do a credit assessment as it sees fit. There has been no change to this rule other than the one month qualifier.

For residential customers:

  • If an existing residential customer is buying an additional post-paid service on a plan longer than one month, then their telco must check the customer’s repayment history.
  • For new residential customers buying a post-paid service on a plan longer than one month, and with a total value over $1000, the telco must
  • Get information from the customer about how they will ‘afford’ the service
  • Get an external credit check from a credit reporting agency.
  • A new residential customer includes someone switching from a pre-paid service with their telco to a post-paid service with the same telco.

What happens if someone doesn’t pass the credit assessment?

  • After following these steps, if the telco considers the consumer can’t meet the financial obligations, then they must let the consumer know, and give information about lower cost options and pre-paid services.

Excess data charge warnings

Before customers use up all their data, telcos need to send an alert letting them know what excess data charges will apply. But note:

  • This applies to new plans launched 5 months after the new Code starts (ie: on 1 January 2020)
  • For plans already in the market (or marketed before December 2019) this notification can be given when the customer has used all their data
  • The usage alerts can be up to 48 hours old

Financial hardship

Telcos need to offer 3 of the following options to keep the customer connected:

  • Spend controls
  • Service restrictions
  • Transfer to a pre-paid service
  • Transfer to a hard cap or shaped data service
  • Low cost temporary options

They also need to offer 3 of the following options to assist with financial arrangements:

  • Temporary postponement or deferral of payments
  • Alternative plan options, including pre-paid
  • Discounts or debt waivers
  • Waiving late payment and cancellation fees
  • Incentives to make payments, like payment matching

The time permitted for telcos to make financial hardship assessments is reduced from 7 to 5 working days, from 1 January 2020.

When do the new rules take effect?

Most of the new rules start on 1 August 2019, but some have been delayed to 1 January 2020 to allow telcos to make system changes.

What is ACCAN’s take on the new Code rules?

The new Code rules are an improvement, but our view is that they don’t offer enough protection for consumers. Many of the new changes are limited and conditional, and there are areas where minimal improvements have been made.
More specifically, we’d like to see:

  • All telco websites comply with the WCAG guidelines so that people with disability have full access to online information.
  • Telcos required to provide information on the accessibility features of all devices they sell, not just those specifically designed for people with disability.
  • Telcos complying with the ACCC Compliance Guide ‘Don’t take advantage of disadvantage’ in all their dealings with customers and consumers.
  • Sales practices dramatically improved by restructuring sales incentives to take account of the best interests of the customer; requiring sales staff to actively ask the customers what their needs are; and offering options at a range of price points.
  • Customer service improvements driven by explicit obligations to reduce wait times, increase first contact resolution, and improve customer service staff performance.
  • Credit assessments consisting of an affordability check that takes into account the customer’s liabilities, not just their source of income, and extended to existing customers purchasing new plans or upgrades.
  • Excess data warnings given well before data limits are reached, provided in real time, and allowing customers to opt out of excess data add-ons.
  • Financial hardship policies and contact details for hardship teams promoted further to encourage customers experiencing financial difficulties to contact their telco early.

The ACMA’s enforcement priorities for 2019/20 include a focus on the critical areas of sales practices, credit assessment and financial hardship. This will be a test of the new rules. ACCAN will be working with our members, financial counsellors and legal centres to identify any trends of potential non-compliance that emerge and referring these to the ACMA for action.

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