Phone porting clampdown wins thumbs up – but is it enough?

Proposed new identification measures, designed to reduce mobile number fraud are continuing to win favour in the industry – but there’s a caveat, with one vendor calling on Australia to go even further.

The new telco regulations, announced by the Federal Government earlier this week, are aimed at preventing the hijacking of mobile numbers which can then be used to access personal and financial information.

In announcing the plans, Paul Fletcher, Minister for Communications, said fraudulent number porting affects thousands of consumers each year with average losses of more than $10,000.

The new measures include the mandatory use of two-factor authentication before mobile numbers can be transfered between providers.

The Australian Communications and Media Authority, which has been directed to make the new rules mandating stronger identify verification processes, hailed the move earlier this week.

Now the Telecommunications Industry Ombudsman too, has applauded the announcement, noting it has received complaints about consumers having their bank accounts drained and email inboxes accessed through mobile number theft.

Ombudsman Judi Jones says the announcement is a positive step toward safeguarding mobile consumers from fraudsters.

“A lot of work has been done over the past year by the telco industry to address the security risks associated with mobile phone number theft, and I welcome the industry’s continued work towards consistently robust identity verification procedures. It is important to ensure these procedures keep up with evolving technological risks.”

Also giving a thumbs up – albeit a guarded one – is Robert Schwarz, managing director of software vendor Nuance Communications which says the move is ‘a step in the right direction’ – but one which can be improved on.

Schwarz says Nuance research shows fraud is a ‘massive’ issue impacting nearly a quarter of Australian consumers every year to the tune of $3,300 per person.

“As an organisation operating in fraud prevention and security, we still see too many cases where traditional knowledge based security methods like password are the industry norm,” Schwarz says.

“Cracking passwords has really become a routine for hackers, and I’m not surprised to see an average of 250 data breaches reported every six months in the context of the notifiable data breach scheme.”

He’s calling for the regulations to be extended to all industries handling consumer or business data, rather than just niche scenarios like telco rules.

“Another concern is that MFA and 2FA are only going to be viable for a limited amount of time. Hackers are learning fast and already discovering ways to bypass them.

“Even though they are still very secure, it is a patchy approach that fraudsters will force us to revisit in just a few years.”

He notes that just a few weeks ago, the FBI released a notification stressing out the insecurities of MFA, and urging organisations to start planning beyond with biometrics security.

NBN service quality complaints on the rise

Complaints about service quality, connections and migrations involving Australia’s National Broadband Network (NBN) rose in the first six months of 2019, despite complaints relating to the country’s broader telecommunications services falling overall during the year ending June.

This is according to the latest figures by the Telecommunications Industry Ombudsman (TIO). The TIO’s annual report for the financial year ending June 2019, released on 25 September, paints a picture of increasing complexity among the issues Australians are complaining about when it comes to their telecommunications services.

“Complaints about phone and internet services in Australia have continued their downward trend, and this is good news for consumers and the telecommunications industry, but this is only one part of the story,” said Ombudsman Judi Jones. “The volume of complaints coming back to us unresolved shows an emerging picture of complexity in technical and small business issues.

“Some measures we have taken to address this are the formation of specialist teams to handle these escalated complaints, and working closely with the phone and internet providers to better understand the barriers to resolving these issues,” she said.

According to the TIO, the 12 months from July 2018 to June 2019 saw 47 per cent of escalated complaints closed within 60 days, compared to 77 percent in FY2017-18.

The top five complaint issues about internet services were no action or delayed action by a service provider, with 13,976 complaints, service and equipment fees (13,509 complaints), slow data speed (8,668 complaints), intermittent service/dropouts (7,915) and delay establishing a service (7,431).

At the same time, the top five complaint issues about mobile services were service and equipment fees, with 12,905 complaints, no or delayed action by provider (11,675 complaints), resolution agreed but not met (4,263), misleading conduct when making a contract (3,656) and termination fees (2,975).

Altogether, the TIO received 132,387 complaints throughout the year, representing a year-on-year fall of 21 percent. However, for the first time, complaints relating to internet services exceeded those of mobile services, with 43,164 complaints – or 32.6 percent – and 40,103 complaints, respectively.

Complaints relating to services delivered via the NBN comprised a large portion of the total regarding internet services. According to the report, 23,362 complaints were recorded in FY2018-19 about service quality on the NBN. Complaints increased from 2.1 per 1,000 premises on the network in the first half of the year to 2.5 per 1,000 in the second half of the year.

Services delivered over the NBN were the subject of 48.2 percent of complaints about service quality during the 12-month period. By comparison, 40.4 percent of such complaints revolved around services delivered via other networks. Mobile networks accounted for 11.3 percent of complaints of this nature.

Meanwhile, 11,635 complaints were recorded in FY2018-19 about changing providers or establishing a connection to the NBN. Complaints increased from 6.7 per 1,000 premises added in the first half of the year, to 8.6 in the second half of the 12-month period.

Indeed, 56.4 percent of all complaints relating to connection and changing providers were about services delivered over the NBN. However, this comes as little surprise, given that, as the national broadband wholesaler draws closer to the completion of its rollout, more end consumers are being connected to the network.

“With transition to the NBN, providers offered a range of new products and services. As a result, we saw a new range of complaints and enquiries from consumers navigating the changed environment. The increase in complaints about internet services is one example of this,” the TIO report stated.

By comparison, such complaints involving services delivered via other networks accounted for 30.6 percent of the total, while mobile network services were at the centre of 13 percent of complaints about connection or changing providers.

Unsurprisingly, the country’s largest telecommunications player, Telstra, claimed the lion’s share of complaints, accounting for roughly 50.2 percent, although it should be noted that the company enjoyed a 19.5 percent fall in complaints from the previous year’s tally of 82,528.

Optus, as the country’s second largest telco, came in second, with 23.9 percent of the total. Like Telstra, Optus saw a fall in complaints against its name, enjoying a 22.2 decrease, year-on-year. Optus was followed by Vodafone, iiNet and TPG Internet, with 5.1 percent of the total, 4.3 percent and 4.1 percent, respectively. All experienced a year-on-year decrease.

“We are pleased to see that complaints decreased in every state, and for all of the providers listed in the report,” said John Stanton, CEO of telecommunications industry body, the Communications Alliance.

“There has been significant work over the past two years by Industry to improve the customer experience, including – but certainly not limited to – NBN Co and RSPs [retail service providers] achieving better communication and coordination for consumers and businesses as they migrate services to NBN-based networks,” he said.

Telcos fined $88K for breaking NBN info rules

The Australian Communications and Media Authority (ACMA) has fined seven telcos a combined total of $88,200 for failing to comply with rules aimed at ensuring consumers receive adequate information about their National Broadband Network (NBN) services.

Telechoice, My Net Fone, Aussie Broadband, Activ8me, Flip TV, Mate Communicate and Hello Broadband have all received infringement notices from the ACMA for failing to comply with the Telecommunications (NBN Consumer Information) Industry Standard 2018.

The infringement notices are the first such notices to be issued under the new standard, which requires telcos to provide clear and meaningful information about their NBN plans in their advertising and in one-page key facts sheets, since it came into effect in September last year. 

The standard itself is part of a broader suite of rules drawn up by the ACMA in 2018 in an effort to improve Australian consumers’ experience migrating to the NBN. Among the rules introduced by the ACMA is a requirement of NBN resellers to give consumers the information they need to choose an NBN plan that works for them. 

Other rules introduced by the ACMA require telcos to test that their new NBN services are working, provide an interim service to consumers or reconnect an old service if there are delays in getting a new NBN service working and moving swiftly to resolve consumer complaints. 

The ACMA Authority Member Fiona Cameron said that telcos have had ample time to familiarise themselves and ensure they are in compliance with the ACMA’s NBN rules.

“Failure to comply in this late stage of the NBN rollout is not acceptable and warranted stronger action,” Cameron said.

‘Failing to give consumers clear and honest information about NBN plans is unacceptable and can lead to misleading conduct as recently highlighted by the recent Telecommunications Industry Ombudsman’s report.

“Telcos need to provide information that will assist consumers to choose an NBN plan that suits their needs and if they don’t they will be held to account,” she said. 

The fines come just days after a new report by the Telecommunications Industry Ombudsman (TIO) lifted the lid on the practice of a “small number” of telemarketers misleading and pressuring Australian consumers to sell them NBN services they may not want or need.

In the report, the office of the TIO said that between January and December last year, it received 1,729 complaints about misleading conduct involving services delivered over the NBN.

Misleading telemarketing tactics for NBN services under scrutiny

A new report has lifted the lid on the practice of telemarketers misleading and pressuring Australian consumers to sell them National Broadband Network (NBN) services they may not want or need.

The Telecommunications Industry Ombudsman’s (TIO) Misleading telemarketing of NBN services report, published on 1 August, highlights several telemarketing tactics employed by “a small number” of NBN retail service providers (RSPs), including suggesting consumers will lose their services and phone numbers if they don’t sign up immediately and being misleading about who they work for.

The report comes after an investigation by the TIO into the telemarketing sales practices of several NBN services retail providers, many of which came to the attention of the Ombudsman’s office because it had identified a cluster of similar complaints about misleading conduct by the same provider.

Between January and December last year, the TIO’s office received 1,729 complaints about misleading conduct involving services delivered over the NBN.

“Based on enquiries received by our office, a small number of retail service providers are increasing confusion by using misleading telemarketing practices to sell their NBN plans,” the report authors said. “Complaints of this kind have continued.”

The TIO said that consumers have reported feeling pressured into signing up for NBN services by telemarketers who suggested end users’ current providers won’t be able to supply services once the NBN arrives, and who have provided inaccurate or unclear information about NBN pricing and contract terms.

According to the TIO, consumers reported that misleading telemarketing practices have seen them end up locked into contracts that aren’t suitable, don’t meet their expectations or are more expensive than their previous plans.

Older customers in particular seem to feel the impact of the misleading telemarketing practices, a sentiment consistent with research conducted by the Australian Communications and Media Authority (ACMA), which has found that there was lower understanding about connecting to the NBN among people who are 65 and over.

Australia’s Telecommunications Industry Ombudsman Judi Jones said the telemarketing tactics under scrutiny was concerning behaviour from a “small group” of phone and internet providers, and that it should stop.

“In some cases we have shared information about this issue with the relevant regulators so they can consider further action,” Jones said. “Moving to the NBN is not automatic, and consumers need to know they can make a measured and informed decision about which NBN provider is right for them. If the consumer is feeling pressured by a telemarketer, it is fine to hang up.”

Jones also noted that telecommunications industry body, the Communications Alliance, is currently working with the telco regulator to address aspects of the telemarketing issues.

For its part, the Communications Alliance has condemned the behaviour of RSPs that have fallen afoul of the TIO over their sales tactics. The industry body’s CEO John Stanton said in a statement that providers such as those engaging in misleading sales tactics are “not welcome in our industry”.

NRL PANTHERS COWBOYS“It is very disappointing when a provider breaches consumer trust, and the rules it is required to observe,” Stanton said.

“We are working with Communications Compliance and the ACMA to provide education on supplier requirements across the sector, and will always work with industry members who are looking to improve. We were pleased to see that a provider highlighted in the TIO’s report had revised its practices.”

Stanton, however, suggested that in such a large marketplace – with some 1600 providers, according to the TIO’s 2018 figures – small players sometimes attempt to operate outside of the rules.

“Communications Alliance members are working with the ACMA to act against such behaviour and prevent those providers from continuing to operate,” he said.

The TIO’s report is released as the updated Telecommunications Consumer Protections (TCP) Code comes into effect, with Stanton flagging “vigorous new rules on selling practices”, which are expected to help the ACMA enforce against the practices raised in the TIO’s report.

The revised Telecommunications Consumer Protections (TCP) Code was written by Communications Alliance and its members, in collaboration with consumer representatives, regulators and government. The Code is mandatory for all telecommunications providers servicing residential and small business customers, and is enforced by the ACMA.

It is aimed at providing consumer safeguards in the areas of sales, service and contracts, billing, credit and debt management, financial hardship, and changing suppliers.

Under the new updated Code, when selling long-term, higher-cost services, suppliers will now need to perform an external credit check and obtain information as to how customers will be able to afford the contract.

In a move particularly relevant to telemarketers like those targeted by the TIO, the new Code also sees suppliers face stricter rules on selling practices, requiring them to ensure that sales representatives promote and sell in a fair, transparent, responsible and accurate manner, and that they clearly explain key terms and costs to customers.

“The upgraded protections touch on all customer interactions with their provider,” Stanton said. “This includes strengthened rules on selling practices, credit assessment, and financial hardship.

“These are priority areas for the ACMA and Communications Alliance has been working with them and the industry-created compliance body Communications Compliance to educate providers on their new obligations,” he said.

TELCO COMPLAINTS HIT THREE YEAR LOW

Complaints about telco services in Australia have dropped to the lowest levels since 2015, according to the Communications Alliance telecommunications industry body.

The Alliance says complaints to the Telecommunications Industry Ombudsman for the October-December 2018 period, as a proportion of services in operation for the service providers who participate in the report, decreased for the fourth consecutive quarter, dropping to 6.0 complaints per 10,000 services.

That’s down from 8.7 for the same period a year earlier.

Optus continued to record the highest number of new complaints, at 6.9 per 10,000 services in operation – though that number was a drop from the previous quarter’s 7.7. Meanwhile, Telstra continued to hold its second spot, with 6.6 complaints per 10,000 services and was the only telco covered to record an increase, up marginally from 6.5.

Vodafone logged 3.0 new complaints per 10,000 services in operation, with Amaysim and Pivotel each on 0.5.

Not all service providers participate in the report, which covers complaints about mobile, internet and landline services from residential and small business customers.

Communications Alliance CEO John Stanton noted some of industry regulator ACMA’s new customer service focused instruments coming into effect halfway through the year of improvement, while others commenced towards the beginning of the most recent quarter.

“This has been a multi-faceted effort, and collaboration between industry, government and regulators has been an important part of this success,” Stanton said.

The revised Telecommunications Consumer Protections (TCP) Code will expand the existing Complaints in Context report to include the top 10 recipients of TIO complaints, in addition to any providers who choose to voluntarily participate.

Telco issues run deeper than NBN: Macquarie Telecom

In light of today’s TIO report, Macquarie Telecom believes the issues in the telco industry run much deeper than the NBN, and Group Executive Luke Clifton believes we should “demand to know” what specific actions individual businesses will take to lower consumer complaints, and then hold them to it before the industry ends up facing its own Royal Commission.

The Telecoms Industry Ombudsman (NBN) report released today has led to huge criticism of the NBN, but shining a light on the data reveals that the practices being used within the telecoms industry to date are not working, and we can’t just blame the NBN for that.

The Ombudsman Judi Jones herself this morning on television said that she is more concerned with the three-quarters of complaints not related to the NBN.

Collective punishment through sweeping rule and regulation changes is not the answer now – it has never worked in other industries.

The Financial Services Royal Commission has been exposing the lazy systems and sharp customer practices of an industry dominated by too few large companies. The system failed despite tight regulation and pages and pages of industry-specific consumer protection rules.

It’s time to put the responsibility back to individual businesses and demand to know what specific actions they will take to lower consumer complaints, and then hold them to those commitments. Like banking, it is the more competitive ‘challenger businesses’ in the telecoms industry which are bucking the trend and setting the bar with better customer service.

These are the companies that make it their business to understand and care about their customers and organise themselves to deliver great service because that is how they grow. The heavyweights in telco aren’t trying to grow their already-dominant customer base because between them the top three have close to 90 per cent of the market.

Instead, they are trying to extract every dollar from those they already have, which means taking the knife to in-house services like sending customer-facing roles off-shore. This is why generic, industry-wide rules don’t work and never will.

Forcing those who are the worst offenders to fix their own problems, and then holding their feet to the fire, is the only short-term solution, and potentially the beginning of solving the deep issues of the industry before it faces its own Royal Commission.

Luke Clifton, Group Executive at Macquarie Telecom