Government stays TIO execution

The TIO received strong industry support during a consultation with the government on whether to axe the Ombudsman scheme.
Written by Corinne Reichert, Contributor

The Australian government has decided not to abolish the Telecommunications Industry Ombudsman (TIO) after all, following a consultation with industry that showed strong support for the external dispute resolution (EDR) scheme.

"[There was] near universal support from both consumers, industry, and other industry Ombudsman schemes for EDR in the telecommunications sector to continue being provided by the TIO, but acknowledgement that improvements could be made to the TIO Scheme," Part A: Complaints handling and consumer redress Consumer Safeguards Review Report to the Minister for Communications and the Arts said.

"The review suggests that it would be appropriate to implement reforms to the current TIO scheme rather than establish a new EDR body at this time. This approach would see the existing EDR arrangements maintained, but further reformed and enhanced."

The report came in response to the first part of the government's three-tranche approach to its Consumer Safeguards Review, which is separated into complaints handling and consumer redress; reliability of telecommunications services; and choice and fairness in the retail relationship between the customer and their provider.

According to the report, complaints handling and consumer redress should be restructured under: A "transformed" EDR scheme being provided by the TIO; improved internal dispute resolution (IDR) from industry via clear and enforceable rules; "an empowered and active regulator"; and publicly reporting complaints data.

The report made a series of recommendations, including that the Australian Communications and Media Authority (ACMA) have an observer role at TIO board meetings "to ensure transparency" and to give the board "access to regulatory expertise".

The TIO's response [PDF] pointed out that during its 30 years of operations, both government and independent reviews "consistently endorsed the model as being in the best interests of consumers".

The TIO also made six recommendations to the government, including that it continue enabling the ACMA to support internal dispute resolution via standards, monitoring, and enforcement; retaining the referral process as an essential element of EDR; retain the industry-based Ombudsman model; and retain independent reporting by the EDR scheme alongside the ACMA's reporting.

The Ombudsman also recommended that the TIO's powers be expanded to enable it to award compensation for non-financial loss; and that the government introduce a registration requirement for telcos.

"The industry-based Ombudsman model, the TIO, should be retained given it meets the design features set out in the consultation paper," the TIO wrote.

"It meets the guiding principles as articulated in the government benchmarks for dispute resolution; it is funded by industry in proportion with complaints received; it is independent -- its governance structure and decisions are not controlled by industry, consumers, or government ... it requires consumers to have attempted to resolve the complaint with the provider; [and] it provides complaints data to the ACMA and the Australian Competition and Consumer Commission (ACCC)."

The Communications Alliance said it welcomes the decision to retain the TIO, but "cautioned against government recommendations that could threaten its independence".

"Industry has never controlled the TIO -- nor should we," Comms Alliance CEO John Stanton said.

"By the same token, we do not believe that the TIO should be placed under the control of the industry regulator, the ACMA."

The Australian Communications Consumer Action Network (ACCAN) said it will "monitor" the uptake of any recommendations related to the TIO's handling of complaints to ensure it does not slow down the process or make it more difficult for consumers.

"ACCAN supports a 'no-wrong-doors' approach for lodging a complaint with the TIO. This means consumers should not have to jump through hoops to have their complaint escalated and heard," ACCAN director of Policy Una Lawrence said.

Shadow Communications Minister Michelle Rowland, meanwhile, called the original plans to dump the TIO "devious".

"Mitch Fifield has today dumped his dud plans to abolish the Telecommunications Industry Ombudsman, a proposal roundly opposed by Labor, consumer groups, and the telecommunications industry," Rowland said.

"That ridiculous plan lasted all of five months -- about the same period of time it seemingly takes the minister to pick up papers in his in-tray."

Labor had in July slammed the government's plans to dump the TIO, saying the Australian government should be focused on preventing telecommunications complaints rather than on who they get reported to.

"Labor's priority is to fix the root causes by addressing technology problems, and to put in place an NBN Service Guarantee to deliver less downtime for consumers and greater accountability in the industry," acting Shadow Communications Minister Stephen Jones said at the time.

According to Jones, Labor's proposed NBN Service Guarantee would "ensure industry have the right incentives to be responsive and fix problems before those problems turn into complaints".

Following the rapid rise in complaints to the TIO, the federal government had announced a review of the telecommunications consumer safeguards, with Communications Minister Mitch Fifield in July unveiling a consultation paper [PDF].

"Consumers are fed up with poor service and inadequate safeguards when their telco fails to address a complaint," Fifield said.

"The TIO had more than 158,000 complaints last year, compared to just over 2,000 complaints to the New Zealand Telecom Dispute Resolution service and around 9,000 complaints to the Canadian telecommunications complaints scheme. Australians are being let down by a system which isn't working."

The consultation paper suggested several ways of improving complaints handling, including establishing a new EDR body as a replacement for the TIO, which would be "independent of industry" and aimed at addressing "complex" complaints.

The department added that the ACMA should be given responsibility for collecting industry performance and complaints data, including publishing reports with analysis.

Earlier this week, the ACMA revealed that 41 telcos were not providing consumers with the minimum complaints-handling information required under a new National Broadband Network (NBN) standard.

In August, the ACMA announced being able to directly enforce its new NBN migration rules, with the federal government agency's powers backed up by the ability to commence court proceedings to seek injunctions and civil penalties of up to AU$10 million.

The TIO's 2018 annual report, published last month, meanwhile said that while complaints were up marginally for the year, they began dropping in the final quarter: Complaints increased by 6.2 percent year on year, but dropped by 17.8 percent quarter on quarter in Q4.

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