ACMA hands telcos customer service plan

The Australian Communications and Media Authority (ACMA) has laid down a plan to improve customer service with the release of its Reconnecting the Customer draft public inquiry report.

Australian telecommunications users are living in a "confusopoly" in which "bill shock" is common and advertising practices can be misleading, according to the ACMA. Many consumers do not and cannot fully understand the services that they purchase, nor do they comprehend charging arrangements, it said in its report.

ACMA chairman Chris Chapman said consumers were "long suffering and very frustrated".

"Confusopoly has been a reality," Chapman said at the release of the report, which follows a year-long inquiry into the industry's customer service and complaint-handling problems.

The report proposes that Australian internet service providers and telcos carry out six consumer protection measures, the implementation of which would be ensured via increased regulatory scrutiny.

Chapman said that the industry's Telecommunications Consumer Protections Code was currently under review, and that the ACMA proposals gave the industry an opportunity to respond by including the authority's recommendations. The ACMA also indicated that it would likely impose more direct intervention by imposing industry standards and service provider determinations if the industry didn't act on its own.

"The way the telecommunications industry in Australia has dealt with its customers must change," said Chapman. "During our comprehensive review it also became clear the telcos understand the need for that change, and this plan provides both the specific action points and the incentives to implement them."

The six proposals outlined in the report were:

1. The first proposal aims to improve marketing and advertising practices. The authority recommends, for example, that rules be introduced which prohibit carriers from using certain terms that confuse consumers and only allow them to make representations about network coverage if those claims can be substantiated. Advertisements for plans without a cap or shaping would need to disclose the lack of such measures. A unit pricing rate would be imposed for voice calls, text messages and data under the proposal to enable comparisons.
2. The ACMA also tackled product disclosure, proposing that carriers provide a critical information disclosure summary to consumers before a sale, including information such as term of the contract, maximum amount to be paid for early termination, minimum monthly payment, cooling off periods and spend management tools.
3. Proposal three looked to performance, suggesting that providers with more than 30,000 residential or small business customers be required to report to the authority on the number of complaints it receives, and the number of repeat contacts made by the same customer over a certain period. Carriers should be encouraged to publish a customer service charter with commitments to a common set of service standards, according to ACMA.
4. Expenditure management also received attention, with ACMA saying that carriers should be required to offer measures or tools that allowed customers to monitor their expenditure in real time, with a limit to be set by the customer so that they don't go over a particular spend.
5. The authority recommended that providers be required to implement complaints handling procedures that are ISO compliant and that they set minimum benchmarks for dealing with complaints.
6. The ACMA also believed that the Telecommunications Industry Ombudsman (TIO) governance be changed for better dispute resolution. It proposed having one oversight body, which would be comprised of equal numbers of consumer and industry representatives and an independent chair. The authority also proposed that providers which were not a member of the TIO scheme from operating in the telco sector. The authority did, however, also point to the review currently being carried out on the TIO.

The report follows on from almost 210,000 complaints and inquiries to the TIO in 2009/10, which the ACMA called "remarkably high".

"The raw statistics suggest that the Australian telecommunications industry is not delivering good customer care and that many consumers are dissatisfied," the report stated.

It also said many consumers believe service providers "are as bad as each other", with people unwilling to change telecommunications companies due to the high costs associated with contract lock-in periods.

Chapman said change would require behavioural shifts in the telecommunications industry and strong regulatory oversight by the ACMA.

"We are confident that the industry will respond positively to the challenge," Chapman said.

"The die is cast, we put it all out there in the report ... the clock is ticking."

The draft report, Reconnecting the Customer, will be available for submissions until 15 July, with the final report expected to be released in August.