New telco rules take aim at poor sales practices, financial overcommitment

The Australian telco industry regulator has signed off on the latest revision of the Telecommunications Consumer Protections (TCP) Code, with new rules aimed at protecting consumers from poor sales practices and over-committing financially.

The revised TCP Code, which was developed by industry body the Communications Alliance, compels telcos to assess customers’ ability to pay for the services they purchase and to clearly explain key terms and conditions, allowing customers to make more informed decisions.

Among the new rules is a requirement for telcos to obtain information from new customers on total contracts exceeding A$1,000 (roughly A$45 per month) about how they expect to be able to pay their bills.

Moreover, the new rules call for an external credit check from a credit reporting body, with these additional provisions also applying to pre-paid customers moving to post-paid accounts. The Code has also been expanded to provide protections to more small businesses.

According to ACMA Chair Nerida O’Loughlin, the regulator has seen evidence of customers being encouraged to sign up to multiple plans which not only do not meet their needs, but are also excessive or beyond their financial capacity.

“The impact of this is serious, particularly for those in vulnerable circumstances, leading to financial hardship and denial of access to critical services,” O’Loughlin said.

“The new TCP Code puts the onus on telcos to ensure customers understand what they are buying. We will be subjecting telcos to close scrutiny as to how well their practices conform with the new Code,” she said.

The ACMA said it will monitor and investigate non-compliance and test the effectiveness of the new rules, which are enforceable by the regulator.

The Communications Alliance, which developed the revised Code with input from government, industry and consumers, hopes that the new rules will help to provide greater transparency about the comparative customer service performance of the major service providers in the local market.

According to the industry body, this will be achieved, at least in part, via an expanded ‘Complaints in Context’ index, which is published quarterly.

The ‘Complaints in Context’ report typically provides the number of new Telecommunications Industry Ombudsman (TIO) complaints lodged against each participating service provider as a proportion of the telecommunications services that provider has in operation.

For Communications Alliance CEO John Stanton, the latest revision of the TCP Code comes at an important time for both the telco industry and consumers.

“As telecommunications become more central to everyday life and consumer expectations evolve, we are also seeing rapid change within the industry, with more providers joining the marketplace and evolution in product offerings and in the service delivery chain,” Stanton said.

“It is vital to… ensure consumer protections keep up with the pace of change, in pursuit of ongoing and positive improvements in consumer experience,” he said.

Suppliers will have one month from 1 July to become compliant with most of the changes in the new revised Code.

Leave a comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s