There is finally hope for consumers after the regulator, the Australian Communications & Media Authority, today released its findings and recommendations for major reform following a year-long inquiry into the industry’s customer service and complaint handling problems.

ACCAN says the ACMA has proposed a strong set of recommendations that, if implemented, have the potential to substantially transform the telecommunications industry.

 “The ACMA’s Reconnecting the Customer report is an in-depth and well researched exposé of the current state of the telco industry’s customer service and complaint handling that the ACMA and its Chair, Chris Chapman, should be proud of,” said ACCAN CEO Teresa Corbin.

“It confirms the worst-kept secret in town – that the current self-regulatory regime and the market has failed. Telco customers have had enough and the ACMA, in recognising this, has signalled a major shift in their approach to regulation. If the proposed recommendations are implemented, we might finally have a telco market that is fair for consumers.”

“For far too long, consumers suffered at the hands of indifferent telcos who have failed to deliver on customer service and complaint handling. What the regulator has proposed today is a solution-based on a mixture of mandatory standards and provider rules that – crucially – will be enforceable, along with an improved Telecommunications Consumer Protection (TCP) Code.”

The recommendations address some of ACCAN’s key concerns including a ban on confusing advertising terms like “cap” and “unlimited”, and a requirement that any claims regarding broadband speeds are substantiated.

The telcos may also be forced to provide “comparable” pricing. Unit pricing is already mandated for the supermarket sector, for example, and ACCAN says a similar approach would cut through the current confusopoly that passes for marketing in the industry.

ACCAN says one of the recommendations that it has lobbied hard for is the proposed requirement that providers allow their customers to nominate a maximum credit limit on their account each month and real-time alerts when the customer is approaching and at that limit.

It is also proposed that if the telcos fail to allow their customers to take control of their accounts, then the telco will not be allowed to charge the customer any more than a suggested 30% in excess of the plan’s “cap”.

This would effectively mean that if a customer is on a $49 a month plan and the telco doesn’t allow the customer to nominate a ceiling on their bill, then the most that monthly bill can be is $63.70.

“If it is implemented this recommendation could signal the end of “bill shock”. Importantly, it would finally give customers the ability to plan and monitor their monthly spend and real-time information to track it,” said Ms Corbin.

Other significant changes include one-page critical information disclosure summaries offered pre-contract, i.e. at the point of sale, and a requirement that telcos make public internal complaints data so that consumers are better able to choose a provider who has a good record in customer service.

The regulator also looks likely to force providers to comply with the existing Australian Standard in relation to complaint handling, and, importantly, work closely with the Telecommunications Industry Ombudsman (TIO) to identify systemic issues sooner.

ACCAN says it looks forward to working with the ACMA during the six-week consultation period and with the industry body Communications Alliance to continue to try to improve the Telecommunications Consumer Protection (TCP) Code.

“The report today confirms that the current industry Code has failed and we urge the ACMA to remain strong and resist pressure from industry to back down. These changes to the self-regulatory regime would for the first time put consumers at the heart of telco regulation,” said Ms Corbin.

The ACMA is due to release its final report and recommendations in August this year.

Media contact: Elise Davidson M: 0409 966 931 TTY: 02 9281 5322

Read the ACCAN Fact Sheet on Telco Regulation.pdf [Adobe Acrobat PDF 38.9 KB]

Download: ACMA Reconnecting the Customer inquiry.doc [Word Document - 60.8KB]

Download: ACMA Reconnecting the Customer inquiry.pdf [Adobe Acrobat PDF - 44.8 KB]