ACMA finds telco repeatedly breached code

The Australian Communications and Media Authority (ACMA) has published the findings of its investigation into the activities of Comms Service Ops, reporting that the telecommunications provider has repeatedly failed to comply with the Telecommunications Consumer Protection (TCP) Code.

The telco, previously known as SoleNet, breached the code on 24 instances between April 14 and May 5, 2015, with the ACMA finding that it misrepresented the nature of calls made to its customers; made misleading and inaccurate assertions; omitted key information; failed to obtain informed consent from consumers before transferring their services from SoleNet to Sure Telecom; failed to provide consumers with important information about interruptions to its service during the transfers; failed to inform consumers that penalty or cancellation fees may have to be paid; and failed to notify customers of the completion of the transfer.

The ACMA had already directed Comms Service Ops to comply with the TCP Code on April 9, when a previous investigation, undertaken due to a "disproportionately large" number of complaints to the Telecommunications Industry Ombudsman (TIO) about the telco, found that it had breached the code.

"What is particularly disturbing in this case is that this is the second occasion in recent times that the ACMA has found the company engaging in behaviour which failed to meet important consumer protections in the TCP Code," said ACMA chairman Chris Chapman.

"The ACMA also notes around the time that SoleNet changed its name to Comms Service Ops, four new companies were registered. These four companies -- Tech Group Aus, Tech Group NSW, Tech Group Qld, and Tech Group Vic -- have the same sole director as Comms Service Ops, and each trades under the name SoleNet. The sole director of all these entities was also the sole director of Sure Telecom, which itself clocked up multiple breaches of the code in 2014."

The new findings have amounted to the telco breaching its previous direction to comply, with the ACMA now considering its enforcement options. The ACMA has the power to give formal warnings and directions to comply with the TCP Code.

Once a company has breached a direction to comply, the ACMA may issue an infringement notice, accept an enforceable undertaking from the company, or begin proceedings in the Australian Federal Court seeking a pecuniary penalty.

Last week, the ACMA also found Vaya and Live Connected to be non-compliant with the TCP Code by requiring customers to provide a AU$20 security deposit in order to ensure customers paid for the service they were using.

This contravened the TCP Code, which states that service providers are only permitted to request a security deposit following an individual credit assessment in relation to the specific product being purchased by the consumer. Neither Vaya nor Live Connected carried out these credit assessments.

Vaya and Live Connected acceded to the ACMA's finding, agreeing that they will no longer take security deposits without first undertaking a credit assessment.

The ACMA in October also directed six telcos -- AussieSim, Btel Communications, Datawave Internet, Golden IT, Harbour of Technology (Hotnet), and MVoice -- to comply with the TCP Code after failing to lodge a statement of code compliance for the last two years.

In September, the ACMA had formally warned more than 20 telcos over failing to lodge a statement of code compliance.

The formal warnings, issued under Subsection 122(2) of the Telecommunications Act 1997, were sent out to 25 telcos, including Amnet, Tele-Talk, Novatel, Infiniti, Blue Telecom, Wire Networks, Supercheap Telco, Telco4u, ReddeNet, and Call Central Communications.

The ACMA issues formal warnings to companies that are first-time offenders, with the regulator presently debating further action to be taken against those already under investigation for other breaches.

The ACMA updated its TCP Code earlier this month, saying it will provide more flexibility and simplicity for telcos.

The new code [PDF] simplifies how telcos are to provide information, removes duplication under Australian Consumer Law and the Privacy Act, and cuts down on repetition of obligations throughout the code.

"The updated TCP Code reinforces the ACMA's commitment to working with key stakeholders to ensure regulation remains relevant and effective, while giving industry more flexibility in how it provides the necessary information to consumers," said Chapman.

The TCP Code, which first came into effect in July 2012, serves the primary purposes of requiring telcos to provide consumers with clear information about what their mobile phone plans offer, including a two-page summary of every plan; notify customers about how much voice and data they have used under their plan; and suggest spend-management tools to prevent future overuse.

Customer complaints handling was also made more effective and timely under the code.