‘ The Telco Code has run its course and failed to deliver’: ACMA must explore other options to protect consumers
The Australian Competition and Consumer Commission (ACCC) has called on the Australian Communications and Media Authority (ACMA) to reject a proposed consumer protections code drafted by the telecommunications industry for failing to adequately protect consumers. The ACCC said the revised version of the Telecommunications Consumer Protections (TCP) Code that has been submitted to the ACMA by telco sector peak body Communications Alliance, “continues to suffer from fundamental shortcomings that weaken its ability to protect consumers,” and has called on the ACMA to proceed to other regulatory options.
CEO of the Consumer Action Law Centre, Stephanie Tonkin, called for direct regulation of telcos as essential services with commensurate protections.
“After almost a year of consultation and multiple proposals presented, the Code review process has failed to deliver what telco customers need,” Ms Tonkin said.
TCP Code Review Committee members the ACCC, the Telecommunications Ombudsman (TIO), and the Australian Communications Consumer Action Network (ACCAN), have provided their feedback to the ACMA identifying serious gaps in protections left unsatisfactorily addressed since the last round of consultation.
“The feedback provided by consumer facing members of the Review Committee makes it clear that the draft Code presented is not fit for purpose,” Ms Tonkin said.
“It is riddled with vague promises and assertions, unenforceable guidance notes, and lacks the necessary firm commitments needed from telcos to assist customers in vulnerable circumstances.”
The ACCC stated that the Code has failed do enough to prevent harmful sales practices, and must do more to assist customers experiencing vulnerability, including people experiencing domestic and family violence (DFV). The continued support for commission-based selling, the lack of accountability through defective monitoring and compliance, and the failure to sufficiently direct customers to low-cost options and recognise telco services as essential were noted by the ACCC as other areas of concern.
“This is simply not good enough at a time when consumers are finding it difficult to afford day-to-day living expenses, especially when telcos are providing an essential service that people can’t live without,” Ms Tonkin said.
“Customers need their telco provider to treat them fairly and this includes making a genuine effort to keep people connected to their service and to be more proactive in providing affordable options,” she said.
Earlier this year, the ACMA provided Communications Alliance with clear guidance about the areas in the initial TCP Code package that needed substantial improvement. In a joint statement at the time, consumer advocates also agreed that much more needed to be done to improve consumer protections.
In May 2024, the ACMA Chair, Nerida O’Loughlin detailed how telco services are being used to perpetrate DFV and financial abuse. She stated that the ACMA would move to further direct regulatory approaches where the TCP Code was found to be deficient to stop the unacceptable level of harm still being experienced by telco customers.
The ACMA must now decide whether it is in the public interest to proceed with the Code process or change course and recommend that the Government turn to other regulatory options, such as creating enforceable standards akin to the Financial Hardship Standard introduced by the ACMA this year.
Under section 117 of the Telecommunications Act 1997 (the Telco Act), the ACMA cannot approve versions of the Code unless it can be satisfied the Code will provide ‘appropriate community safeguards’.
“The way consumers interact with and rely on their telco services has dramatically changed over the years. Staying connected is no longer a luxury but essential, including for safety, employment and accessing other essential services including vital community, health and government services,” Ms Tonkin said.
“Based on the detailed assessment by the members of the Review Committee who see the harms to consumers and the failings of an ineffective TCP Code everyday, it would be almost impossible to conclude that this Code comes anywhere near meeting ‘appropriate community safeguards’ as required by the Telco Act.”
The latest TCP Code review package can be found here and the ACCC’s submission can be found here.
*Consumer Action Law Centre, Financial Counselling Australia, Economic Abuse Reference Group, WEstjustice, CHOICE, Financial Rights Legal Centre, Indigenous Consumer Assistance Network, Consumers’ Federation of Australia, South Australian Council of Social Service, Care Consumer Law, ACT, Anglicare NT, Bush Money Mob, WA, MoneyMob Talkabout, NT, Hume Riverina Community Legal Service, Consumer Credit Legal Service, WA, Consumer Policy Research Centre, Council on the Ageing (COTA) Australia, Victorian Aboriginal Legal Service, Redfern Legal Centre, South-East Community Links and Australian Council of Social Service.
ENDS
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567, media@consumeraction.org.au
