Customer service is extremely poor in the Australian telecommunications industry, and has been for many years. Misleading advertising, unfair contract terms and deceptive sales practices are so common as to have essentially become the norm. The unacceptably high number of complaints to the Telecommunications Industry Ombudsman (TIO), although alarming in themselves, probably only reveal a small proportion of the problem. Consumer Action notes that this number rose 94.2% in 2007-08, yet would still contend that this represents the metaphorical “tip of the ice-berg”.
Although frustrated by poor service delivery, the practical reality is that most consumers – particularly vulnerable consumers – are unlikely to carry their complaint through to the TIO. When one considers that ACMA then acts on only a very small proportion of TIO complaints, it becomes clear that the vast majority of poor trader practice in the Australian telecommunications industry goes unsanctioned, which in turn provides little genuine incentive for service providers to improve their performance. All of this contributes to poor ongoing outcomes, and leaves consumers with little hope of improvement in the short to medium term.
Consumer Action prefaces its response to the ACMA Inquiry with the very strong view that the current regulatory framework designed to protect consumers of telecommunications services in Australia is fundamentally flawed. Reliance on the Telecommunications Consumer Protections Code (TCP Code) has not delivered acceptable outcomes for consumers. In light of this failure, Consumer Action believes that the current model of industry self-regulation promoted by the Telecommunications Act 1997 (the Act) should be abandoned, and legislative reform undertaken to move towards direct government regulation, and where appropriate, robust co regulation.
Given Consumer Action’s views on this matter, we have confined our responses to questions 11 and 22 of the ACMA Inquiry. These questions relate directly to the issue of regulatory reform, which Consumer Action contends is the core issue. Until such time as that occurs, structural deficiencies in the current framework will continue to inhibit effective consumer protection.
Finally, Consumer Action notes that in October 2008, Choice and Galexia released a report addressing the poor standard of consumer protection in the industry, titled Consumer Protection in the Communications Industry: Moving to best practice. The report made six recommendations including developing a set of core consumer protection principles in the telecommunications legislation, aligning the telecommunications code development processes to industry codes in other sectors, including independent code compliance monitoring, improved dispute resolution mechanisms and more power to independent regulators.
To read our submission, click here:“Reconnecting the Customer”- ACMA public inquiry consultation paper.