The Australian Communications and Media Authority (ACMA) has formally warned telecommunications provider Crunch Tel over transferring its customers without first gaining their consent.
According to the ACMA, Crunch Tel breached Clauses 7.1, 7.2.2, 7.3, 7.4, 7.5.1(a), and 7.6 of the Telecommunications Consumer Protection (TCP) Code, which contain rules that providers must follow when transferring customers, such as after the sale of a service provider's business to another service provider.
In October last year, Crunch Networks had transferred 408 landline, mobile, and ADSL and National Broadband Network (NBN) internet customers to Crunch Tel as part of the sale of its business assets, with neither company contacting customers to let them know, inform them of their termination rights, or obtain their consent.
"Customers have the right to know that they are being transferred between service providers, and must consent to that transfer prior to it taking place," ACMA Chair Nerida O'Loughlin said on Friday.
"It is unacceptable for a telco to notify its consumers that their services have been transferred after the event."
In breaching Clause 7.1, Crunch Tel failed to gain consent from the 408 customers; under Clause 7.2.2, Crunch Tel did not ensure that the customers received information prior to initiating the transfer; under Clause 7.3, Crunch Tel did not take steps to validate that the telecommunications services of the 408 consumers could be transferred; under Clause 7.4, Crunch Tel did not keep the 408 customers informed during the transfer process; and under Claude 7.5.1(a), Crunch Tel "did not use reasonable efforts to notify 408 customers of the completion of a transfer on the day it occurred", the ACMA said.
Lastly, Crunch Tel failed to create and retain records to enable the 408 customers to verify that the transfer process was undertaken in accordance with the TCP Code's overall chapter 7, breaching Clause 7.6 in the process.
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.
It also constrains their actions in regards to consumers.
The ACMA had updated its TCP Code two years ago in an effort to provide more flexibility for telcos by simplifying how telcos are to provide information, removing duplication under Australian Consumer Law and the Privacy Act, and cutting 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," former ACMA Chair Chris Chapman said at the time.
Customer complaints handling was also made more effective and timely under the refreshed code.
The Federal Court has said SoleNet and Sure Telecom and their director James Harrison engaged in unconscionable conduct and undue harassment of customers between 2013 and 2015.
The ACMA has formally warned Exceed Connect after it transferred customers onto its new service-providing entity without consent.
Comms Service Ops, previously known as SoleNet, has repeatedly been non-compliant with the TCP Code, according to the ACMA, including breaching orders to comply.