Bad telcos must pay up: ACCAN

The Telecommunications Industry Ombudsman (TIO) should be given beefed-up powers to impose harsher penalties on telcos that have been found to have breached consumer protection obligations, according to the Australian Communications Consumer Action Network (ACCAN).

As part of 47 recommendations made in a submission (PDF) to the review of the role of the TIO announced by Communications Minister Stephen Conroy last month, ACCAN said that the ombudsman needed to be given powers to refer suppliers who were found to be in breach of their obligations to the Australian Communications and Media Authority (ACMA). The ACMA should then be able to strip a telco of its carrier licence if it finds that the company has breached a determination made by the TIO.

Customers should also receive financial compensation if the TIO rules that a carrier has breached consumer protection obligations, the consumer protection group recommended, and the telcos should be charged for every issue the customer has rather than just per complaint made to the ombudsman.

"We're of the belief that if we are ever to see real improvement in customer service and complaint handling, the TIO must be able to provide financial disincentives for telcos for poor practices before the wheels fall off altogether, especially in light of the National Broadband Network that's coming," ACCAN CEO Teresa Corbin said in a statement.

"There's a perfect storm at present to address these long-standing customer service and complaint-handling issues and, we believe, the impetus from telcos to start to improve their relationships with customers and their reputation as an industry," Corbin said.

Some of the other recommendations included an SMS call-back option for low income earners who could not afford the cost of a mobile phone call to the TIO, as well as a campaign to increase consumer awareness of the TIO and its role in resolving disputes between consumers and the telco industry.

Corbin said that the structure of the TIO did not reflect the needs of the modern telecommunications industry, saying that the TIO board should be made up of both industry and consumer representatives, with an independent chair.

The review was initiated by the government in response to a sharp rise in complaints to the TIO last year. The rise had been linked to Vodafone's ongoing network issues towards the end of 2010, with the telco incurring a 96 per cent increase in the number of complaints. At the Communications Day summit last week, Australian Competition and Consumer Commission chairman Chris Chapman said that the TIO had briefed him on the numbers of complaints for the first two months of 2011, which were at "record levels". Speaking at the same event, TIO Simon Cohen welcomed the government's review of his agency.