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New strict code for telcos may lack the power to back it up

  • Code will protect consumers against bill shock
  • Complaints must decrease by 2014
  • Can the extensive new measures put in place be consistently monitored?
Written by Mikaella Clements
12/07/2012

The Australian Communications Consumer Action Network (ACCAN) has welcomed a new and improved Telecommunications Consumer Protection TCP) Code, but warned that without sufficient power to back it up, the code may not pack the desired punch.

The changes to the TCP were registered today as part of the rulebook that outlines how telecommunication providers should engage with their customers. Current deficiencies and problems in the Code have been fixed with these new updates, which include such rules as:

  • Most telco advertisements are now expected to include the cost of a two-minute national call, the cost of a standard SMS, and the cost for 1MB of data.
  • Telcos must provide a "Critical Information Summary" (CIS) that includes all pricing information, inclusions, and minimum spend information for each product in a standard form.
  • Telcos must warn customers when they have used 50%, 85%, and 100% of their monthly allowance for phone and text credit and data.

 

Frustrated customer

Will there be less frustration under the new code? Time will tell!


These new, stricter measures are intended to give the telecommunications industry the chance to radically decrease the amount of complaints they get in the next 12 to 24 months – or face regulatory expansion, meaning that telcos will no longer have their current freedom in terms of self-regulation.

ACCAN Chief Executive Teresa Corbin is feeling positive about the new enforcements, but worried about ACMA's ability to enforce them.

Corbin said: "We're encouraged that ACCAN and other consumer representatives, the ACMA and Communications Alliance, working together, were able to improve the TCP Code and are hopeful that its adoption will result in clearer advertising, easier comparison of products, better information about contracts, and better tools to help consumers avoid bill shock."

However, Corbin drew attention to the fact that while ACMA has done a great job in the past over identifying root causes for the high numbers of complaints that telcos attract, and that the resulting changes to the TCP make the Code fairer than it has ever been before, ACMA may not have the power to enforce these changes on telcos.

Corbin said: "The big issue here is that the ACMA does not at present have strong enough powers to enforce the Code. Enforcement powers are essential in getting industry compliance. The Australian Competition and Consumer Commission, for example, has much stronger powers and its issuing of fines has sent a strong message to the telecommunications industry that its advertising cannot be misleading."

ACCAN says that it, along with the ACCC, will form part of the watchdog team, inspecting advertising, contracts and critical information summaries, and referring possible breaches to the ACMA or ACCC where appropriate. Along with that, ACCAN is in the process of creating a new Consumer Guide to the TCP Code, which highlights key "need-to-know" information from the hefty document.

They will also begin this month the first national telecommunications consumer survey, which will mostly be used as a benchmark for a follow-up survey 12 months from now that will hold telcos accountable. ACCAN will attempt to determine what the "everyday customer experience is like".

The follow-up survey will expect to see major changes. Corbin said: "In 12 months' time, when we conduct the second survey, we would expect to see less complaints about customer service and complaint handling, and a significant reduction in the number of people experiencing financial difficulty due to unexpectedly high bills.

"If we don't, then it will call into question whether or not this industry is able to comply with its own rules."

ACMA chairman Chris Chapman backed up this harsh approach to getting telcos to essentially pull it together, saying: "In May 2010, I effectively outed the industry on its performance. The industry realises how close it came to direct regulation on a number of parts [especially] on advertising.

"The industry has responded and it's come out with outcomes that meet our expectations but now it has to deliver. But it's not that in 24 months all of a sudden we'll press a button and start pushing for powers – it's cumulative."

Despite this, though, Corbin insists that ACMA needs stronger powers to enforce the new Code, and has written to the Minister for Broadband, Communications and the Digital Economy Senator Steven Conroy urging him to up the ACMA's powers.

"Enforcement powers are essential in getting industry compliance," Corbin said. "The Australian Competition and Consumer Commission, for example, has much stronger powers and its issuing of fines has sent a strong message to the telecommunications industry that its advertising cannot be misleading."

It's definitely a decision that has come with a lot of debate around it, as is obvious, and it's unclear as of yet whether or not ACMA lack the power behind their punch to prompt telcos into better service. All the same, we're going to declare this a cautious cause of celebration, as any regulation to telcos is a great sign for customers.

At Compare Mobile Plans we tend to focus on positives, like the best deals from Vodafone or Virgin at any given time, or how to get the most out of a provider. However, it must be remembered that the telco business is often a cutthroat one, and customers often get the worst end of the deal. That's why comparison sites like ours exist, to help customers see through the dazzling advertisements and great sounding deals to find out what each plan is really offering.

If you want help seeing through complicated telecommunications jargon to find the best plan for you, give us a call on 1300 850 518 and we'll be happy to help you out. We can explain how cap plans work, find the best plan for you, and walk you through all the 'hidden' charges so that you can see exactly what you'll need to pay for.

Or check out some of the most transparent 0-month unlimited contracts from providers like Dodo (1300 301 550) and Amaysim (1300 791 895) for a plan that comes with no surprises.

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