The TIO sent two of its staff to the offices of Australian Internet Billing on Tuesday after complaints were made by dial-up Internet users who received invoices from the company. Some of those billed are understood to have claimed they had never heard of Australian Internet Billing until they received the invoices. However, because the TIO is a member-funded regulatory body that Australian Internet Billing is yet to join, it cannot take any direct action against the company. The office of the TIO now says Australian Internet Billing must join its membership; its failure to do so would likely constitute a violation of the Telecommunications Act, according to TIO company secretary Phillip Caruthers.
Internet dumping is the controversial practice of leading dial-up Internet users to run a small program -- often executed when the user clicks the "yes" button on a pop-up window when online -- which disconnects them from their Internet service provider and causes their computer to dial in to a "premium" Internet service, which is often billed at a rate of several dollars a minute. Internet dumpers get around fair trading and trade practice laws by detailing terms and conditions in the pop-up windows, which users frequently ignore or fail to read carefully before agreeing to run the program.
"They click on 'do you want to see porn', their machine drops their connection to their current ISP, and takes a line... to Australian Internet Billing Pty Ltd and then that line is then connected to the Internet and provides access to the service. The service that they're providing that makes them an ISP," Caruthers explained. Because Australian Internet Billing acts as an ISP, legislation dictates the company must join the TIO, he added.
Dumping was highlighted by the ombudsman as a major issue for telecommunications regulators during an interview with ZDNet Australia last year.
"The fastest growing area of billing dispute over the last 12 months has in fact been dumping complaints," Pinnock said. "If you talk to anyone in a regulatory area... this is one of the biggest issues that has been brought to the fore in policy terms."
It's an area that Pinnock says is difficult to police.
"First of all you've got to show that there's an intention to defraud, or an intention to deceive, and that's not always easy. The other thing is even if the [dumping] site puts people on notice, there's still the issue of over-commitment, where essentially the carriers are acting as sorts of credit providers, even though they're not," he explained.
The TIO can, however, impose fees on its members. If Australian Internet Billing is forced to become a member of the TIO, the telco body will have the authority to invoice the company for complaints made against it. The fee for a complaint varies, Caruthers said, depending on "how easily they're solved". The TIO has in the past taken action to wind up companies using its leverage as a creditor, when member organisations have failed to pay their bills.