ACA calls for customer input on telco 'bill-shock'

The Australian Communications Authority (ACA) has called for public comment on the customer credit management practices of telecommunication vendors, responding to complaints from customers on incidents of "bill-shock".

The Australian Communications Authority (ACA) has called for public comment on the customer credit management practices of telecommunication vendors, responding to complaints from customers on incidents of "bill-shock".

The ACA has released a discussion paper titled "Preventing Unexpected High Bills: Credit Management in the Telecommunications Industry" that explores issues of Internet dumping, credit management, regulatory arrangements and cites several examples of bill-shocked customers in recent years.

ACA member, Allan Horsley, said the ACA is looking to the public and the industry to comment on whether they think more regulatory measures are required to help telco's better manage the credit of it's customers.

"It is critical for consumers to have access to credit management tools to help them manage their spending on telecommunication services," said Horsley. "These could include warnings when spending reaches a particular level, or caps to control spending."

However, according to Horsley, the ACA is "reluctant" to impose billing system requirements on telecommunication vendors.

"In line with industry self-regulation, our aim is to encourage the telecommunications industry to develop a strategy to help consumers manage their spending," he said.

The paper cites an example of "bill-shock" resulting from Internet dumping -- the practice of disconnecting the user from their usual Internet service provider connection to an overseas connection -- which resulted in a phone bill of AU$14,000 for one telco customer.

The customer's difficulties were said to have occurred from a change in the dial in point of presence from a local call connection to an STD one. The customer was not notified by their telco of the rising bill - that covered three months of Internet usage - as their account had unlimited credit.

This case is still under investigation by the Telecommunications Industry Ombudsman.

The paper explains that customer complaints of Internet dumping have been frequently investigated by the TIO -- however few real cases of failing to warn the user have been found.

"Where the TIO has investigated and was able to visit Web sitesââ,¬" usually adult Web sites, or games and music Web sitesââ,¬"he has generally discovered that there was some form of notice on the Web site advising the user that higher call charges could be expected," stated the report.

The other case examples describe an incident involving a small business that changed its PSTN service to an ISDN service (on advice from its telco) as the owners were told that calls made through the service would be capped at AU$274 per month.

However the business received an AU$24,000 phone bill for the first six month period.

The third victim of "bill-shock" cited in the report received an AU$800 phone bill resulting from four international calls; the customer was under the impression that she was on a plan that capped international calls at AU$6.50. However, she was unaware that this offer wasn't valid if she used an international operator to direct the call.

The paper stated that the services which are most likely to provoke an unexpectedly high bill include premium voice and data services, internet diallers operating on international numbers, international voice and data calls, SMS services, uncapped broadband services and modem services that involve repeat dialling.

It also warned that emerging services such as premium voice services, propriety network services (that operate on mobile networks) and m-commerce services (that involves bundling non-telecommunication fees onto the phone bill, such as concert tickets or parking) may also result in unexpectedly high bills.

The ACA said that measures to avoid bill-shock may involve a more robust assessment of the customers' ability to pay their bills, offering spending limit options to customers, setting telephony and Internet service caps, more frequent billing and more customer interaction.

Horsely said that customers making a submission to the discussion paper should focus on how consumers may be able to take advantage of the proposed credit management measures.

"We also want to know from consumers whether they think these measures are reasonable," said Horsely.

In addition to taking written submissions, the ACA will be holding public meetings in Melbourne and Sydney during August to discuss the issue.