Consumer Action Acting CEO Tania Clarke says Minister for Communication Michelle Rowland should act now to implement tough new laws to clean up the telco industry.
Ms Clarke’s call for action comes as the Australian Competition and Consumer Commission (ACCC) reports it has no confidence that the Telecommunication Protections (TCP) Code will protect vulnerable consumers from harmful telco practices and is calling for an alternate regulatory framework that is fit for purpose.
“The message to government is loud and clear, the telco industry consistently fails customers, especially those who are vulnerable, on multiple levels, and is not meeting community expectations,” Ms Clarke said.
“Our financial counsellors working on the National Debt Helpline have seen an increase in calls from people struggling with telco issues, including cases of over-selling and very poor responses towards people suffering from financial hardship and family violence.
“What we need is direct regulation to ensure telcos don’t continue to engage in this harmful conduct and instead provide the support needed to people who are struggling so that they stay connected to their essential telco services.”
In its submission to the TCP Code review, the ACCC noted a ‘consistent and widespread compliance culture was lacking across the telecommunications sector,’ including the use of aggressive sales practices where staff are incentivised to make a sale ‘at any cost’. All this has led the telecommunications industry named ‘the most distrusted industry in Australia’*.
Consumer Action Senior Policy Officer David Hofierka said the ACCC submission notes that the voluntary, industry drafted TCP Code, has not resulted in beneficial outcomes for consumers.
“The ACCC submission reveals that the Australian Communications Media Authority (ACMA) reported more than one million complaints by customers in 2021-22, and the ACCC itself received more than 4,000 complaints about misleading and deceptive conduct by telco suppliers over the last 2 years.
“This is just the latest in a long line of reports provided by regulators, financial counsellors, consumer and community organisations and the telco ombudsman that show the failures of industry self-regulation where consumers always seem to lose out.”
“No other essential service, such as energy, water and the banking are permitted to write their own rules when it comes to protecting consumers and it should be no different for telcos,” he said.
Mr Hofierka said the ACCC points to the responsible lending laws that apply to banks as a best practice model and a better solution to stop the over-selling of expensive and unsuitable telco products to customers who cannot afford them.
“We need the government to introduce new telco specific mandatory laws to stop bad behaviour causing harm and being incentivised in the first place,” he said.
*Telecommunications industry overtakes Social Media as the most distrusted industry Roy Morgan 4 April 2023
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567, email@example.com