Australia: Telecommunications Consumer Protections Code C628:2012 – a Look at the New Requirements

Last Updated: 29 August 2012
Article by Kristy Dixon

The new Telecommunications Consumer Protections Code C628:2012 (Code) will take effect on 1 September 2012, replacing the previous Telecommunications Consumer Protections Code C628:2007 (Previous Code) and the Guideline to the Previous Code.

The Code places obligations on suppliers in relation to "consumers", which are defined to include individuals using telecommunications products for personal or domestic use and also businesses or NFP organisations which do not have reasonable opportunity to negotiate the terms of their contract and whose annual spend with the supplier is less than $20,000

The Code implements a range of enhanced requirements for telecommunications suppliers. Section 1 sets out our recommendations as a result of the Code. In section 2, we provide a high level review of some of the major changes implemented (excluding changes relating to consumer sales, service and contracts). Section 3 sets out the new or enhanced obligations imposed in the area of consumer sales, service and contracts.

1. Recommendations

As a result of the new requirements in the Code telecommunications suppliers need to:

  • review their Financial Hardship policy for compliance with the Code by 1 September 2012.
  • review their Complaint handling policy for compliance with the Code by 1 September 2012.
  • develop the required pricing elements for the cost of making a standard mobile call, sending a standard SMS and using 1 megabyte of data to implement in its advertising of pricing. This must be in place by 27 October 2012.
  • develop an approval process in which advertising is reviewed by a person trained in advertising laws.
  • prepare Critical Information Summaries for offers by 1 March 2013
  • ensure bills to customers on included value plans include the total amounts of each of the two previous billing periods. This must be in place by 1 March 2013.
  • prepare a Customer Information Compliance Statement, a Compliance Plan, a Compliance Attestation and, if relevant, a Statement of Independent Assessment. Whilst the Code requires these to be implemented by 1 April 2012, we recommended these compliance documents and processes be developed more promptly so that a supplier can be aware of all the processes it must implement and information it must make available as a result of the Code (for example, information required about the appointment of authorised representatives or about telecommunications products offered to consumers with disabilities, or any relevant information required about security tools or spend management tools).
  • prepare for the requirement to provide electronic notification to customers after reaching certain usage and expenditure levels. This must be in place by 1 September 2013 for all data allowance notifications and also for non-data expenditure notifications for suppliers with 100,000 or more included value plan services, and by 1 September 2014 for non-data expenditure notifications for suppliers with less than 100,000 included value plan services.

2. High level overview of new Code requirements

2.1 Compliance requirements

A new body, known as the Communications Compliance (CC), will monitor compliance with the Code. Suppliers must:

  • Compliance statement: prepare a "Customer Information Compliance Statement" which specifies where customers can access information required to be made publicly available under the Code. This is to be provided to the CC annually, with the first statement to be provided before 1 April 2013.
  • Compliance plan: prepare and maintain a documented compliance plan which outlines initiatives to support compliance with the Code and which is prepared in accordance with the Australian Standard on Compliance Programs AS 3806 – 2006.
  • Attestation: provide a "Compliance Attestation" endorsed by the CEO or senior manager of the supplier stating the compliance plan has been prepared to support compliance with the Code and in accordance with the Australian Standard. This must be provided to the CC annually, with the first attestation to be provided before 1 April 2013.
  • Independent assessment: if it has over 100,000 services in operation, provide to the CC, at the same time it provides the first Compliance Attestation, a "Statement of Independent Assessment" by an external qualified assessor verifying the Compliance Attestation.

The CC can request suppliers to provide information relating to their compliance with the Code, and will publish on its website compliant and non-compliant suppliers. The CC may refer suppliers to the ACMA for investigation, and the ACMA can direct suppliers to comply with the Code. The ACMA can take enforcement action under the Telecommunications Act 1997 if a supplier does not comply with such a direction. (The Telecommunications Industry Ombudsman also oversees compliance in assessing complaints, and can refer suppliers to the ACMA.)

2.2 Billing

The Code enhances billing requirements:

  • suppliers must not bill for charges older than 160 days from the date they are incurred (as opposed to 190 days under the Previous Code)
  • although clause 5.2.1(b) of the Code provides that a supplier does not have to supply a bill to a customer in respect of a pre-paid service, the Code does extend requirements relating to billing, including that suppliers must make available information about its billing procedures and billing options before a consumer becomes a customer, which will affect pre-paid services.
  • on request, a supplier must provide all billing information for a customer or former customer for up to six years. This must be provided in at least one medium that is free of charge for two years.
  • there are additional bill content and itemisation provisions.

2.3 Financial hardship and credit and debt management

There are increased obligations regarding customers experiencing financial hardship. The Code also imposes further requirements in relation to Spend Management Tools and credit assessments provided by a supplier, and in relation to disconnection and restrictions of service.

2.4 Transfer

The Code clarifies the requirement for informed consent when a customer is changing suppliers. There are also enhanced requirements around notifications to customers after a transfer and new provisions concerning customer transfers as a result of mergers.

2.5 Complaint handling

Complaint handling requirements are strengthened, with a streamlined definition, tighter timeframes, requirements to advise customers of complaint outcomes and requirements to more explicitly promote the alternative dispute resolution services offered by the Telecommunications Industry Ombudsman. Supplier's must also give customers unique complaint reference numbers or identifiers, for ease of tracking the progress of complaint resolution.

2.6 Post-paid requirements

Some of the more controversial new requirements will apply only to post-paid services. These include:

  • new obligations in relation to electronic notification to customers after reaching certain usage and expenditure levels. Suppliers must provide an electronic notification to customers on certain included value plans and post-paid services no later than 48 hours after they have reached each month:
    • 50% of their expenditure/data allowance;
    • 85% of the expenditure/data allowance; and
    • 100% of the expenditure/data allowance, as well as the charges applicable once 100% of the included value/data allowance is used, that the information in the notification may be up to 48 hours old and that the notification does not include calls or SMS to overseas or usage outside Australia.
    These new obligations are imposed to counteract "bill shock", and commence:
    • for all data allowance notifications, on 1 September 2013;
    • for non-data expenditure notifications for suppliers with 100,000 or more included value plan services, on 1 September 2013; and
    • for non-data expenditure notifications for suppliers with less than 100,000 included value plan services, on 1 September 2014.
  • prominently displaying in advertising pricing elements, such as the cost of a two minute standard mobile call, sending a standard SMS and using one megabyte of data. This is described in more detail in paragraph 3.10 below.
  • additional billing requirements. These include, for included value plans, the total amount of the bill for each of the two previous billing periods, and this particular requirement commences 1 March 2013.

3. Consumer sales, service and contracts

We have compared chapter 4 of Code relating to consumer sales, service and contracts with the Previous Code, and set out the new notable obligations below. In some instances, the Code imposes entirely new obligations, in other instances it changes or enhances previous obligations.

3.1 "Critical Information Summary"

The Code requires a supplier to provide a "Critical Information Summary" of each of its current offers. The summary must not be longer than two A4 pages and must include information set out in clause 4.1.2 of the Code. The summaries must be readily accessible on the supplier's website, there must be a link to the summary where a supplier advertises the offer on its website, and it must be available free of charge at supplier stores. This obligation commences on 1 March 2013.

3.2 Special Promotion

Suppliers must provide a summary for the underlying offer on which any special promotion is based.

3.3 Other relevant information

Suppliers must make available on its website without charge other relevant information about telecommunications products it offers beyond that covered in the summary. Clause 4.1.3 of the Code provides a list of required information, much of which is similar to or develops on information a supplier was obligated to provide under the Previous Code on request of a customer. New required information includes:

  • information to assist consumers estimate what capacity they need to meet their usage requirements.
  • information about whether a consumer must take any action to activate or deactivate international roaming and the basic charges, including that roaming charges may be different to international calls from Australia and charges may be incurred for making and receiving calls. This must be displayed in a prominent easily navigable/searchable position on their website.
  • if acting as a reseller, the name of the principal carrier whose network is used, but ensuring it is clear the reseller is responsible for the service and is not affiliated or related to the principle carrier unless it is.

3.4 Meeting consumer needs

If a consumer identifies a particular need, the supplier must indicate if it has an offer to suit that need and provide information to allow the consumer to assess its suitability. The Code sets out obligations to achieve this, such as training staff and the provision of information relating to consumer needs, usage levels and suitable products.

3.5 Remedies for inaccurate information

If the supplier has provided inaccurate information to a customer about an offer and the customer has relied on it to sign up, the supplier must provide corrective information and an appropriate remedy. Clause 4.1.5 of the Code sets out actions the supplier must take.

3.6 Advertising requirements

There are new restrictions on advertising in relation to telecommunications products under the Code. Many of these restrictions are new or are more onerous than similar requirements under the Previous Code. The Code requires that a supplier must not:

  • headline representations: use headline representations for a price or offer where the overall impression is qualified by fine print terms and conditions that make it unlikely a consumer by the ordinary use could achieve the benefits.
  • unlimited: use the term "unlimited" or equivalent in an unqualified manner when referring to usage, unless ordinary use is genuinely unlimited and not subject to exclusions.
  • no exceptions: use the terms "no exceptions", "no exclusions" or "no catches" or equivalent without sufficient disclosure when referring to a price or offer unless there are genuinely no exceptions.
  • free: use the term "free" or equivalent in advertising a handset or other hardware products or services unless the cost is not recovered over the life of the contract by way of higher costs compared with cost payable were it not provided free of charge.
  • use headline representations:
    • price per minute: as to price per minute for mobile phone calls, or calls using phone cards, which do not disclose extra charges.
    • bundled products or services: as to price of products or services, unless it can be purchased at that price without being bundled, or the advertised price is clearly identified as the price when purchased as part of a bundle
    • offer: as to price of an offer unless exclusions are prominently displayed.
    • prices for data allowance: unqualified, as to ongoing prices for specified data allowance where the price is likely to increase within a reasonable period.
    • phone cards: as to the minutes of call time available on phone cards unless they can be achieved with ordinary use.
  • network coverage: advertise or promote network coverage unless the network coverage is generally available to consumers in the claimed coverage area
  • full minimum quantifiable price: advertise a periodic price for a telecommunications product without prominently displaying (not necessarily as prominent as the periodic price) the "single price".
  • cap: use the term "cap" to advertise new offers unless the offers contain a "Hard Cap". A "Hard Cap" is defined as a maximum amount applied to a customer's use of telecommunications services, which cannot be exceeded. (Exceptions exist for advertising existing offers for up to six months after registration of the Code, and for references to existing offers in online information, billing information, contracts etc).
  • Basis of claim: make claims in relation to broadband speed, network coverage and other performance characteristics unless the supplier is able to substantiate this.

3.7 Advertising medium

The level of detail provided in advertising must be appropriate for the medium. The main terms must be captured in the body of the advertising, disclaimers must not negate the principal message and the main terms and a supplier must take into account the typical amount of time consumers are able to view the particular advertising.

3.8 Disclaimers

Disclaimers must be clear and understandable with regard to the type of advertising, including the medium or format used and intended audience. Disclaimers must not negate the principal message of the advertising.

3.9 Recontracting

Recontracting customers must be informed of features available on new plans that may not be available on their existing plan, e.g. spend management notifications.

3.10 Standard Charges for Text Advertising

A supplier must display the following pricing elements when advertising in text the price/value of certain included value plans or post-paid services:

  • the cost of making a standard 2 minute mobile call;
  • the cost of sending a standard SMS; and
  • the cost of using 1 megabyte of data.

Online strip, banner or tile advertising of pricing must have a link that displays the standard pricing elements.

These obligations commence 27 October 2012.

3.11 Compliance processes

Suppliers must maintain and comply with adequate review processes to ensure their advertising complies with the law and the Code. Claims must be able to be substantiated, training provided to marketing staff, complaints monitored, non-compliance addressed and records in relation to compliance retained. Suppliers must also maintain an approval process in which advertising is reviewed by a person trained in advertising laws to ensure advertising is not false or misleading and complies with the Code.

3.12 Selling practices

The Code sets out obligations in relation to Sales Representatives. Suppliers must ensure their Sales Representatives sell telecommunications products in a fair, comprehensible and truthful manner, without exaggeration or omission of key information. The Code sets out obligations regarding Sales Representatives concerning training, monitoring and providing information. Interaction with consumers must be courteous and fair, and disciplinary action taken against inappropriate behaviour.

3.13 Consent

Supplier's must keep records of consumers' consent to sales. If the supplier refused to supply a consumer with a telecommunications product for any reason, it must inform the consumer of the reasons.

3.14 Consumers with different needs

The Code contains further requirements around providing information on telecommunications products that suit the disclosed needs of consumers with a disability and how such products operate. This information must be available on a supplier's website and training must be provided to Sale Representatives on interaction with such consumers.

Sales Representatives must communicate with consumers effectively in English. If a supplier advertises services in another language, for such consumers the supplier must provide information about finding help in that language or about appointing an advocate.

3.15 Customer Contracts

A supplier's Standard Form Customer Contract must be available and displayed on its website. Terms that have been withdrawn must be maintained on the website in certain circumstances. The Standard Form Customer Contract must be clear, and all contractual terms regarding an offer must be set out or clearly incorporated by reference. Upon request, a supplier must make available information about the activation and expiry date of any current contract with a customer.

3.16 Customer Service

Customer enquiries must be dealt with timely and effectively. The Code sets out actions the supplier must take to achieve this, building on requirements under the Previous Code.

A supplier must ensure a customer's personal information is protected and it must have in place storage and security procedures and make sure staff are aware that they may face disciplinary action for failure to follow procedures.

There are also requirements around the appointment of authorised representatives. The supplier must provide access to information about appointing an authorised representative and to any relevant forms required to evidence the appropriate authority.

3.17 Customer Service Charter

A supplier may choose to have in place a Customer Service Charter that addresses customer service information such as:

  • channels through which customer contact is supported;
  • what to expect when making an enquiry using one of those channels;
  • what to expect when making a complaint;
  • consequences of the supplier failing to meet any commitments it has made.

The assistance of Erin McGushin, Solicitor, of Addisons in the preparation of this article is noted and greatly appreciated.

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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Kristy Dixon
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