Australia: Reconnecting the Customer – Final Report by the ACMA

September Alert
Last Updated: 12 September 2011
Article by Richard Pascoe

The ACMA yesterday released the final version of its report into customer care and customer complaint issues in the telecommunications sector, entitled Reconnecting the Customer.

The final report follows an almost 18 month inquiry into these issues by the ACMA.

Although the report is steeped in the measured tones expected of a regulator, the ACMA has actually given the industry something of an ultimatum – you have 5 months to fix the issues identified in the report through the self-regulatory codes of practice, or the ACMA will impose a mandatory regulatory standard.

There are 2 main areas of concern for the ACMA – areas that are well-known anecdotally, for which the ACMA received numerous submissions, and which by far and away cause the most number of consumer complaints. They are:

  • lack of clear information about telecommunications services in marketing and advertising material, and at the point of sale; and
  • "bill shock" – consumers receiving bills for service far higher than they expected based on their understanding of the plans they were on.

The ACMA goes on to identify 6 proposals for dealing with these issues and with the issues of complaints handling generally – another area giving rise to many complaints from consumers. The full list of proposals, objectives and ways to achieve those objectives can be found on the ACMA's engage site at However, in summary, they are as follows:

Marketing and Advertising Material

Enforceable rules regarding advertising practices. Specifically:

  • prohibiting confusing terms such as "cap" – where it actually means a minimum rather than maximum spend. Other word and terms such as "free" and "no exclusions" are also in the ACMA's sights;
  • ensuring representations about network coverage and speeds are substantiated;
  • providing a consistent and reasonable basis for comparisons of pricing of services in a minimum spend plan

To achieve this, the ACMA wants providers to disclose to consumers in all advertising regarding, and all bills under, minimum spend plans:

  • A standardised rate for each of:

    • a 2 minute call in Australia to another mobile – based on the highest rate charged plus the flagfall;
    • a standard SMS in Australia;
    • downloading 1Mb of data – based on the highest rate under the plan.
  • An estimate of the number of calls included in the plan based on that standardised rate (including flagfall) and assuming that the value that can be used on calls or SMS is used on calls only

Product Disclosure

Consumers must receive – before any sale:

  • a summary of critical information – including term of contract, maximum amount payable for early termination, minimum monthly payment;
  • information regarding voice call costs (based on the standardised rates), SMS costs, data use costs, any exclusions;
  • information regarding other important contractual information such as customer service contact details, roaming cost warnings, access to dispute resolution processes and TIO contact details.

Performance Reporting and Customer Service Charters

The industry must Implement a customer care metrics reporting framework for providers with more than 30,000 customers that includes number of customer contacts and number of complaints received by the providers.

Expenditure Management

Providers must provide notifications to customers to allow customers to manage their spend. Specifically, providers must:

  • send customers an SMS (for mobile) or email (for broadband) alerting the customers that reach a specified expenditure point (the ACMA suggests somewhere between 50% and 80% of monthly spend), and another notification at 95% of monthly spend.

Internal Complaints-Handling

The ACMA wants the industry to:

  • adopt the definition of "complaint" set out in Australian Standard AS ISO 10002-2006;
  • comply with the principles set out in the Standard for visibility, accessibility, responsiveness, objectivity, confidentiality, being consumer-focused ,accountability and continuous improvement;
  • establish minimum benchmarks for timeliness of complaints handing and reporting.

Changes to the TIO Scheme

The ACMA is also recommending changes to the structure and functioning of the TIO to improve ability of the TIO to deal with external complaints effectively, more efficiently and to meet best practice benchmarks. These appear to be significant changes, although the ACMA notes approvingly in the Report that many of the industry representatives accept the need to improve in these areas and that apart from regulatory sanction, there are significant reputation issues for providers who do not strive for better customer service and better complaints handling.

Indeed, the industry, through Communications Alliance, has indicated already that it is working on the issues identified, with industry and consumer representatives and is confident that these issues will be addressed in the industry's Telecommunications Consumer Protection Code.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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