During a forum today on telecommunications bill shock, the Australian Communications Authority (ACA) called for regulations similar to those employed by the alcohol industry, whereby agencies can intervene when there is already an "extreme usage of the service".
"The issue there is those consumers given access to a high level of credit will probably not qualify for that level of credit in any other market sector," ACA executive manager, consumer and universal service obligation group, Kathleen Silleri, said. "In some respects there are similarities to discussions last year in the alcohol industry. The alcohol industry introduced an alcohol advertising code, and balanced and responsible approach to alcohol. I think the [telecommunications] industry is in the same position with regards to awareness of excessive use."
"The industry has legitimate rights to advertise and promote these products and services and to encourage the use of these services. But it has to be done responsibly. And if the consumer has had too much, we have to have the tools and the ability to say 'no more you've had enough'. There is a need to recognise that there are problems associated with particular services, high cost and vulnerable consumers," Silleri said.
The main focus of today's talkfest -- organised by the Australian Communications Industry Forum (ACIF) -- was to identify the services that most commonly lead to financial or credit management issues and what actions are currently being undertaken by industry sectors to prevent and manage these issues.
The ACIF event aimed to provide a "solid base" for ensuring that industry and regulatory actions were targeted at the appropriate areas in mobile, Internet, broadband, fixed line, 190 numbers and other telecommunications bills.
Dr. Margaret Griffiths from the University of Newcastle presented the results of their study showing that telephone bills account for highest debt incurred, especially for 18 to 24 year old respondents.
The study also showed that 34 percent of young people have visited financial counsellors and that 78 percent have mobile phone debt.
Kristy Delaney from the New South Wales Youth Action and Policy Association said that 90 percent of 12 to 18 year olds own a mobile phone.
"Mobile phones have become a necessity, not a luxury and these are very vulnerable consumers who don't have the financial experience. Our interest is to encourage more people onto prepaid and budget their mobile phone spending," Delaney said.
Issues were also raised by the Ethnic Communities' Council of Victoria regarding the use of jargon in explaining phone and Internet contracts to ethnic consumers whose first language is not English.
The Australian Seniors Computer Clubs Association also raised their concerns about senior citizens and pensioners being punished by high Internet bills because of the lack of information or the use of jargon when explaining the contract to consumers.
ACIF chief executive officer, Anne Hurley, said the gathering was a collaborative exercise between ACIF and its Consumer Advisory Council (CAC), with the goal of examining the issues in an overall community context.
"ACIF has been a driving force in bringing consumer, industry, regulatory and government bodies together to make some concrete progress on the issue of credit management. We are also seeking to identify any gaps in the existing procedures and processes so we can isolate areas that need to be addressed," said Hurley.
John Pinnock from the Telecommunications Industry Ombudsman (TIO) said the body had received almost 60,000 complaints in 2003-2004, with almost 10,000 of those relating to credit control issues.
"Telecommunications providers are credit providers. Services can be used before being paid for and customers can be credit default listed if they can't pay it. However, there is very little assessment of the consumer's capacity to pay and there is no limit to the debt allowed to accrue," Pinnock said.
He added that telco providers are able to monitor the usage of the consumers but "deny liability or responsibility for monitoring the usage."
The TIO is pushing for mandatory price capping for premium services and some other services. However, they added that the capping should be relative to the customer's normal spend.
Paul Clitheroe, chairman of the Consumer & Finance Literacy Taskforce, called for the establishment of a national finance literacy body, the adoption and integration of consumer and financial literacy into the school system and workplace and the introduction of an ongoing social marketing campaign to embed a consumer financial literacy message within the Australian culture.
Representatives from a broad range of industry associations, consumer groups, regulators and government agencies, as well as carriers and service providers, were present during the forum.