Is it TKO for the TIO?

Is it TKO for the TIO?

Summary: Could the continued rise in industry complaints force the government to conclude that the telco industry is incapable of self-regulation?


Could the continued rise in industry complaints force the government to conclude that the telco industry is incapable of self-regulation?

Back in March, Communications Minister Stephen Conroy released a discussion paper on the role of the Telecommunications Industry Ombudsman (TIO). Last week in Sydney he said, if we'd known how the industry was to evolve, we might have taken a different approach when the TIO was established back in 1993.

He gave the address at the Australian Communications Consumer Action Network (ACCAN) conference. That was taken by some as a sure sign that the industry needs to lift its game, or face the consequences. Teresa Corbin, CEO of ACCAN, says a first step should be having a board that has equal shares of the industry and consumer representatives. At the moment she sits on an advisory board and reckons she should have a more influential role in the TIO.

Another alternative is that the government deems, on the basis of rising complaints (new TIO complaints were 31 per cent up in the last quarter), that the industry cannot effectively regulate itself.

Meanwhile, the Australian Communications and Media Authority (ACMA) has released its own investigation into the levels of service offered by its industry. In its report Reconnecting the Customer it highlighted five changes that the industry should include in its Telecommunications Consumer Protection (TCP) code.

That code is maintained by the Communications Alliance. The alliance's CEO, John Stanton, says many of those changes were already incorporated in the code. I ask him whether words will really change much, given that it's a voluntary code.

The real issue might be that the industry doesn't understand what it is doing wrong. I suggested recently on ZDNet Australia that mobile phone plans — a cause of many customer complaints — are confusing to customers. It's a view reinforced by new research, Seeking Straight Answers: Consumer Decision-Making in Telecommunications (PDF), by Paul Harrison, deputy director at the Centre for Sustainable and Responsible Organisations in the Faculty of Business and Law at Deakin University. He suggests some of the systemic problems in the industry will only be fixed with cultural change.

Is it time for the industry to change its ways?

Running time: 32 minutes, 10 seconds

Topics: Government, Government AU, Telcos


Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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  • The TIO is an ineffective and completely biased organisation.

    Telco's need to do better

    Consumers need to take responsibility for their actions and read things before they sign them.

    The TIO needs to be removed entirely; it receives it's funding by fining the telco's - what incentive is their for the TIO to ever side with the telco?

    Of course complaints are going up more people are learning of the TIO's existence and any time they are unhappy about anything their knee-jerk reaction is to make a TIO complaint because they know they can get out of their bill/contract/whatever just by complaining.

    Even though I'm not a customer of Telstra's if I find the colour scheme on their website annoying I can make a complaint and Telstra will be fined for it - how is this a valid complaint?

    The TIO should be funded by the telco's based on number of customers rather than complaints and rather than fine telco's at level 1 it should work with the customer and the telco to resolve a legitimate issue without bias.
  • @Darkpsyd, sorry, mate, but you are talking rubbish.

    You are probably aware, or should be, that TIO is a dispute resolution facility of last resort, which means you can't lodge a complaint there until you have exhausted your options with your supplier.

    TIO does work with both sides to resolve issues, and if they were funded on customer numbers there would be no incentive for badly performing service providers to lift their game.

    And don't waste our time talking about colour schemes; that has nothing to do with TIO.
    • The TIO should be many things and the TIO claim to be many things but in reality they function exactly as I wrote and have commenced a soft marketing strategy to ensure they are anything but the last resort.

      The TIO is a business and the best case scenario for them would be to have every complaint made to them immediately since there is no way for a telco to dispute a TIO charge (

      You can lodge a complaint with them without ever speaking to the provider, they won't act on the complaint but they will still bill the provider for the complaint

      As far as incentives to improve, the current system penalises the telco's but is still far from an incentive to improve clearly

      My colour scheme example may seem strange but I can assure you it and similar non-telco complaints have been received by and charged by the TIO to providers because it is a complaint against a brand and that is all that matters to them.
    • Gnome, I need to correct your understanding on this. What you're saying is technically correct. This is as it is stated by the TIO. However they also take complaints in good faith, meaning they do not require evidence that a complainant has exhausted all avenues of support with the isp.

      I have worked for an ISP in a complaints department so I am aware of this as we have often had to send evidence when a complainant hasn't even attempted to contact us at all in order to get a complaint reversed.

      However it is entirely dependent on the person making the complaint. Most people do make a reasonable effort to work with an isp, to varying levels, but there are some who do actively exploit the scheme and get away with it. With my knowledge I would be exactly the kind of person who could. If I want to have a risk free contract with an isp, all I need to do is manipulate the conversation I have with their sales person even if I do know full well what I'm getting into.

      It doesn't require my level of experience to exploit the scheme either. As complaints are taken in good faith and as the funding model of the tio is based on a complaints by complaints basis with a tiered cost by level of complaint ISP's are given a commercial interest to end a complaint regardless of whether or not the customer's complaint is legitimate. In many cases if a customer wants to get out of a contract and simply refuses the offer from the isp at Level 1, the TIO themselves will upgrade the complaint to Level 2 costing $234 to the isp for the privilege. As the price trebles at Level 3 and depending on the complexity of the customer's complaint (the more points, no matter how frivilous and vexatious still need to be explained to the TIO for them to dismiss these points) an isp may find it better to settle the case rather than argue the point, even if the ISP is in the right.

      As a result the scheme is not neutral and is not neutral by design. However I would like to give TIO credit where credit is due. There are members within the TIO who are striving for positive change. The way in which the scheme works in terms of mediation is good. The TIO's procedures in working with both the ISP's and consumers in complaints to reach a resolution are relatively effective.

      What I am currently musing about based on what Theresa Corbin said in the podcast is that penalties based on the industry code could be introduced into the cost model of the TIO. The fees for the complaints could go down, but penalties could be introduced for code breaches instead. If the voluntary code is incorrect, it can be modified to include more regulations.
  • @Darkpsyd, you really have no idea do you.
    1. You state : The TIO is a business. Wrong it is not a business. It is an Ombudsman. Just like all the other Ombudsmen ie, banking, State or Commonwealth. These departments have the power to investigate Telcos, banks or Government bodies, and make recomendations to the Government or ACMA as to changes needed to resolve issues.
    2. Wrong, you must speak to the service provider before lodging a complaint with the TIO.
    3. Incentives: Fines are imposed by TIO like a court would if you took the matter to the courts.
    Look at the ACCC with regards to false , misleading and deceptive adds of major telcos and you would realize this is just the tip of the ice berg.

    Vodafone had to cancel its adds when it actually was found to have limits and competition etc were not included in caps, which were not stated at time of the TV adds. They had a lawyer state in the add there were no hidden clauses etc, this was just a lie.
  • Mudrat - you're also wrong.

    TIO take comsumer complaints on "good faith" this is industry term for "we don't know if you did take it to your telco or escalate before you complained, but we'll take the complaint anyway".

    Secondly, TIO don't fine anyone. They discuss, mediate, investigate then determine an outcome if it gets to Level 4. The only charges are the ones they impose plus any they request the Telco pay as a result of the outcome.

    TIO don't always get it right, there are no technical people on board and there are definitely consumer advocates who also work there. However, there are many excellent employees who work their **** esoff for ungrateful customers who do use TIO as a "let's get out of this contract for free" card.

    There are problems on both sides, there's more that Telcos can do to help customers, but as a former employee of a rather large telco - customers DO think their telco services should be free frequently and often escalate to get large credits, or whole bills waived and I don't think this is acknowledged by ACCAN (who aren't very credible) or any Telco either.

    The whole industry needs to be cleaned up, on both "sides" if you will.
    • The TIO do have technical people on board. They have a dedicated 'technical team' for complaints which are deemed to contain complicated technical detail. They also have a range of experts including lawyers to help with points of law.

      However I agree that the way things are now aren't ideal and that a revision of the current sytem is required to make the TIO neutral as well as to assist ISP's to find their way to good customer service and relationships.
  • Actually Dark is more correct than any of you.

    When a customer calls up the TIO and say "Telstra" that is logged. $25 against the telco, bam, straight away. No proof, no nothing, just because they are calling about "Telstra" or "Optus" or whoever.

    If the complaint escalates, so does the fine. This is why Telco's go out of their way to fix ombudsman complaints, because its cheaper to fix than to keep paying the escalating charges.

    Having worked with complaints quite a lot, i have a good understanding of how this works.
  • Hi all

    Some clarification:

    It's not a fine, it's a cost-recovery fee (the TIO is industry funded, and their investigation and operating costs are divided amongst the various telcos based on the volume of compalints each telco generated). Telcos can and do dispute these charges when a complaint is referred in error, and the TIO typically will remove that charge.

    The TIO requires customers to make an attempt to resolve the issue with the telco prior to logging the TIO complaint; however, the TIO is obliged to accept a customer's advice in good faith in the absence of any other evidence, so this can lead to cases where complaints are referred to telcos without that telco having an opportunity to resolve the compaint first.

    Of course, in those cases, the telco would have grounds to dispute the cost recovery-fee as the TIO would have (unwittingly) failed to conform to their own guidelines.

    The TIO's role is to mediate disputes between customers and telcos. However,the harsh reality is that there is no incentive for the individual TIO officers to take the side of the telco and every incentive to take the side of the customer. For example, should a telco be dissatisifed with the TIO officer's position on a given compaint, there's not a whole lot to be done about it. When a complainant is not satisfied with the TIO's position, they can request an internal review (which, incidentally, incurs a cost that is passed on to the approriate telco) which amounts to an audit of the TIO officer's actions in relation to the case.

    As you can imagine, TIO officers seek to avoid reviews, sometimes at the cost of impartiality or reason (eg raising Darkpsyd's "colour scheme" complaint because it's easier to refer it to a telco than try to explain to a nutjob that this is not a complaint).

    This is the road to customer advocacy which is not the TIO's role - it is this shift towards advocacy that is destroying their effectiveness; an advocate with as much power over a complaint as the TIO has is a recipe for disaster; mehwhat is quite correct with the 'get out of jail fee' mentality, and with the increase of the TIO profile in recent years more and more people are learning that the TIO will not ask them to qualify their position or offer any supporting evidence. This actually undermines the effectiveness of the TIO as it erodes their integrity, and provides a skewed measure of telco industry complaints volumes because the TIO provides an avenue that the customer might not have gone down had they only had their own morality as a driver (in other words, general complaints aren't going up, but disputes over charges are).

    On the broader scale, the industry doesn't want more regulation, and certainly not gevernment regulation - it will make less money. On the other hand, Stephen Conroy wants people to get off his back about their phone bills - it will get him sacked. (ironically, this leads the telcos to defend the TIO's function as Conroy continually attacks it XD).

    Last thought - when listening to opinions about the Telco industry and the TIO, look at your source. The telcos gripe about the TIO because the TIO forces them to deal with their issues. The TIO gripes about the telcos because they see them as Goliath pushing poor David around. Customers who gripe about the TIO must have had one unbelievably frivolous complaint for the TIO to not pick it up (and let's face it, if the TIO got you what you wanted, you're not likely to complain about them).

    Oh, and Mr Dobbie? The Comunications Alliance industry codes are by no means voluntary - writing them up in the first place and signing off on them was (as was establishing the TIO), but compliance is not. A telco with sufficient code breaches recorded against it (by the TIO, for example) will face hefty fines and possibly even enforcement action by the ACMA.
    • I believe that point is made by John in the podcast.
  • Having owned a Telco previously I can tell you.
    The TIO is NOT for the TELCOS at all. They hate them with a passion.
    In fact I have been told by the person who looks after the Telcos inside the TIO. I quote "I am the only friend you have in this organization so be very nice to me".
    I have had customers ring me up and say "Wipe my bill because I am going to the TIO and I will keep complaining till it gets to level 4. That will cost your telco over $1200. "
    Customer Service Rep: What is wrong with your service?
    Customer: Nothing I just dont want to pay and I will lie.
    Customer Service Rep: I am recording this conversation.
    Customer: I demand my call is not recorded.
    Customer: So are you going to wipe my bill or should I log a complaint.

    So the question is what does the Telco do. They bend over and wipe the customers bill because is cheaper than paying the TIO $1200.
    • @MichaelSaunders What proportion of your customers behaved in way you outlined the example? Can I hazard a guess that it was a minority?
      • It wasn't that uncommon as a CSR at an isp to here the phrase

        "either do this or I'm going to the TIO"

        It is being used as a means by some people to leverage a point of view, be heard when they are frustrated (I sympathise with this part) or simply exploit the TIO scheme for personal gain.

        However it wouldn't matter what scheme you have in place, you will always get some people who will ruin it for the majority.
  • The TIO has definitely helped me on a couple of occasions. My problems were all regarding my iphones. I complained for a YEAR to my phone company and they just gave me the runaround. Reps hanging up midway through a conversation, promising to call back and never doing it, telling me to change firmware repeatedly etc...I have been through it all. Finally a rep agreed that I indeed had a genuine problem and prmised to replace my phone and also compensate me for a year of bad reception and call quality. Midway through that conversation the phone ,as usual froze. when I finally managed to turn it back on again I found that the rep had left an extensive voicemail detailing what they would do to compensate me. When I called back I got a different rep who told me rather bluntly that they could never do what I was promised. He asked me to play him back the voicemail several times. A day later EVERY single one of my voicemails disappeared !! They simply wiped everything . I complained and a very condescending lady told me that I had probably done it myself as "all voicemails are stored on the phone itself" and not on their servers. It was only then that I contacted the TIO. In two days I had a new phone, plus no extension of my contract as they (the Telco) had initially demanded.
    Do you think it would have happened if TIO had not intervened ?
    This is the second time in 3 years that I had to complain to the TIO and in both instances I kept a detailed record of who I spoke to, when each call was made or received, the names of each rep that I spoke with etc.
    If you dont, they just deny everything.
    Thank God for the TIO I finally have a phone that can actually make and receive calls.
  • I have been on both sides. As a consumer I was glad the TIO was there. It was the only way to get a mobile provider to let me out of a contract (6 months from the end) after 18 months of complaints about poor coverage in my area.