Exceed Connect formally warned on telco code breach

The ACMA has formally warned Exceed Connect after it transferred customers onto its new service-providing entity without consent.

Telecommunications provider Exceed Connect has been issued with a formal warning by the Australian Communications and Media Authority (ACMA) after transferring customers to its services without their consent, in contravention of the Telecommunications Consumer Protections (TCP) Code.

The breach arose when, upon being placed in external administration, Exceed Telecom transferred its customer base to Exceed Connect without obtaining their permission. This contravened chapter 7 of the code, with the telco also failing to supply its customers with information about the new supplier and transfer process.

"Suppliers need to ensure that their customers understand what is happening to their service, particularly who is providing it to them," said acting ACMA chairman James Cameron.

"This is especially important when companies are undergoing a reorganisation and transferring their entire customer base to a new entity."

Some customers who then tried to transfer from Exceed Connect to another telco had their services retained by Exceed without consent.

The ACMA updated its TCP Code in December, saying the changes simplify how telcos are to provide information, remove duplication under Australian Consumer Law and the Privacy Act, and cut down on repetition of obligations throughout the code.

The federal government agency also waved through further updates to the code last month, in order to allow more flexibility for smaller telcos and improve the "operational effectiveness" of the code compliance body.

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.

Customer complaints handling was also made more effective and timely under the code.

The TCP Code drove a fall in consumer complaints to the Telecommunications Industry Ombudsman (TIO) of 35.8 percent, from 193,702 in 2011-12 down to 124,417 in 2014-15.

The code has also resulted in generating AU$545 million in savings for customers per year, according to the ACMA.

In order to properly guage the positive effects of introducing the TCP Code, the ACMA offered a AU$154,000 tender in January for a company to conduct research into its impact.

During TCP Code compliance investigations, the ACMA also found Vaya and Live Connected to be non-compliant in December by charging customers a AU$20 security deposit before providing services without carrying out individual credit assessments first.

In October, it additionally directed six telcos -- AussieSim, Btel Communications, Datawave Internet, Golden IT, Harbour of Technology (Hotnet), and MVoice -- to comply with the TCP Code after failing to lodge a statement of code compliance for the last two years.

The ACMA had also formally warned more than 20 telcos in September over failing to lodge a statement of code compliance. Issued under subsection 122(2) of the Telecommunications Act 1997, the formal warnings were sent out to 25 telcos, including Amnet, Tele-Talk, Novatel, Infiniti, Blue Telecom, Wire Networks, Supercheap Telco, Telco4u, ReddeNet, and Call Central Communications.

Along with the TIO, the ACMA is additionally presently assisting an investigation by the Australian Competition and Consumer Commission (ACCC), which has commenced proceedings in the Federal Court against 11 corporations trading as SoleNet and Sure Telecom, and their director James Harrison, due to unconscionable conduct in the supply of telecommunications services and undue harassment in breach of the Australian Consumer Law.