Labor slams government's telco consumer safeguards review

The Australian government has the 'wrong priorities' on complaints about telco services, the Labor party has said, with ACCAN, Comms Alliance, and the TIO also expressing concerns with the Consumer Safeguards Review.
Written by Corinne Reichert, Contributor

The opposition Labor party has slammed the newly unveiled Consumer Safeguards Review, 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.

"The real priority is to fix the root causes of problems: Second-rate technology, lack of transparency, and the lack of proper service standards for rectifying faults and minimising downtime."

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 Telecommunications Industry Ombudsman (TIO), the federal government had announced a review of the telecommunications consumer safeguards, with Communications Minister Mitch Fifield on Thursday 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 suggests several ways of improving complaints handling, including establishing a new external dispute resolution (EDR) body as a replacement for the TIO, which would be "independent of industry" and aimed at addressing "complex" complaints.

"This body should have the power to compel providers to take remedial actions, which could include financial compensation and/or the ability to issue fines," the Department of Communications said.

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

The Communications Alliance responded to the consultation paper by saying it is "digesting the proposals", with CEO John Stanton pointing out that the TIO is already required to report data to the ACMA, and the ACMA is already required to publish this data.

According to Stanton, additional scrutiny is necessary on whether an EDR body is necessary to create.

"The TIO is fiercely independent, with a strong independent chair, independent directors, and even numbers of directors with consumer and industry experience -- it is funded by industry fees but not controlled by industry," Stanton said.

"Whether the cost and disruption inherent in dismantling the TIO and replacing it with a new body can be justified to achieve change that can happen in any event needs to be critically considered."

The Australian Communications Consumer Action Network (ACCAN) similarly expressed "strong concerns" about the removal of the TIO, with CEO Teresa Corbin arguing that the body is "one of the vital elements in the consumer protection regime".

"The consultation paper is proposing the creation of a new external dispute resolution body to only handle complex complaints unresolved between a customer and their telco retailer," ACCAN said.

"Under current arrangements, consumers can escalate a complaint to the TIO if they've been unable to resolve the issue with their telco, regardless of whether it is 'complex' or not. Consumers do not need any obstacle to make it an even longer process to get their complaints resolved."

The Consumer Action Law Centre added that the TIO already "satisfies the benchmarks" for a dispute resolution scheme -- and consumer advocates have in fact "advocated strongly" for a similar model for the finance industry.

The TIO's own response to the review stated that the "assertions and ideas set out in the paper need to be tested".

"In particular, we will be testing the propositions that consumers (especially vulnerable consumers) will have the capacity to work with providers in the model being proposed, and that a new body is needed to achieve greater independence in dispute resolution," the TIO said.

"It is vital that any change to the complaint handing mechanism ensures that residential consumers and small businesses continue to have access to a fair, independent, and effective complaint resolution service."

The government is accepting submissions from industry on whether the TIO's responsibilities should be "transformed" to an EDR body for complex complaints; whether the EDR body should also be "proactively engaged in driving industry improvements, identifying systemic complaints, and analysing root causes or recurring issues"; whether the EDR body's charging structure to lodge complaints be structured to encourage telcos to resolve complaints internally; and the processes for lodging a complaint with the EDR body.

The Communications Department also wants to know whether there would be "any unforeseen issues or unintended consequences of the proposal for a centralised repository and reporting of industry complaint information".

The department is also seeking comment on how telcos can be "encouraged" to resolve complaints without the need for escalation to external resources, including by adding more rules to the ACMA's standards; what barriers exist to prevent telcos from resolving complaints; how responsibilities for resolving complaints in the telco "supply chain" should be allocated; what consumers need to know about telcos' complaints procedures, and when and how they should be notified of these; and how telcos will ensure their staff are trained in such procedures.

Lastly, the government is seeking feedback on how often the EDR body should provide complaints data to the ACMA; whether the consultation paper addresses the major issues for telco complaints handling; what other measures could be included; and what practical timeframes for implementation should be taken into account.

Submissions are due by August 3.

In April, the TIO's 2017-18 half-yearly report had showed NBN consumer complaints more than tripling year on year to 22,827 for the first half of the year. In total, the TIO received 84,914 complaints about all telecommunications services during the six months to December 31, up 28.7 percent year on year.

The top complaints issues were charges and fees, at 38,594 complaints; provider response, at 36,563; poor service quality, at 18,936; connection/changing provider, at 13,844; no service, at 12,831; debt management, at 9,257; making a contract, at 7,003; in contract, at 5,628; equipment, at 2,957; and payments, at 2,398 complaints.

As a consequence, the Australian government had announced its review of the telecommunications consumer safeguards, with Macquarie Telecom at the time warning that rising consumer complaints statistics show "the practices being used within the telecoms industry to date are not working".

According to Macquarie Telecom group executive Luke Clifton, generic industry-wide regulations and consumer protection rules have not helped the banking industry, as shown by the Financial Services Royal Commission.

Clifton said responsibility should instead be put back on how each company will take steps to lower consumer complaints, before a telco Royal Commission ends up being called.

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