TELECOMMUNICATIONS PROVIDERS SUCCESSFULLY IMPLEMENT NEW CONSUMER PROTECTION RULES Sydney, 30 June 2020: Today’s publication of a shadow shopping exercise by the ACMA underlines the successful efforts of telcos to implement a significant consumer protection rule change in a short amount of time.
Industry’s revised Telecommunications Consumer Protections (TCP) Code was registered by the ACMA in July 2019, with only one month lead-time for providers to implement the strengthened protections.
The revised code added a requirement – in cases where a new post-paid service contract would amount to more than $1000 - to ask new customers about their capacity to pay for services and to conduct an external credit check.
The new requirement is in addition to the normal commercial credit-checking procedures that service providers already had in place.
Providers were able to quickly implement extensive system and process changes across all sales channels (online, phone, and in-store) and train of thousands of staff to meet the new requirements.
“While the ACMA’s mystery shopping exercise was unfortunately small - a minute sample size of 37 customers considering the number of credit assessments providers undertake each year – we are pleased that it found broad compliance with these new requirements” said Communications Alliance CEO, John Stanton.
“The report will be a useful resource for telcos to check their processes against, and we look forward to engaging with the ACMA on any lessons that can be drawn from the research.”
All customers in the study who purchased online or over the phone recalled being asked about their capacity to pay, while 21 of the 27 who purchased in store recalled being asked, and telcos obtained external credit checks for all participants who were clearly new customers.
“However, we are not sure that the findings of this minimalist study support an assertion that telcos are not adequately checking customers’ capacity to pay when contracting in store.”
Communications Alliance questioned some elements of the methodology of the exercise. The report was reliant on customer memory – to our understanding, many of the participants were recruited after their purchase experience and thus had no reason to specifically recall the conversation they had in store. Additionally, the survey did not provide the option for a customer to state that they did not recall a specific question.
“We are also concerned that the ACMA appears to have a different understanding, from that of industry, as to what was agreed to be the scope of the requirement to check a customer’s capacity to pay.”
6.1.1 b) (i) of the Code requires telcos to understand how customers will be able to afford their commitments – whether it will be via savings, wages, or another form of income, and where it is via employment, if the customer is part-time, full-time, or permanently employed.
“Striking the balance between ensuring a consumer is able to afford the contract they have chosen while protecting their privacy and preventing discrimination is extremely important, and the Code was drafted to reflect those concerns. We look forward to discussing this matter further with the ACMA,” continued Stanton.
Communications Alliance is the primary telecommunications industry body in Australia. Its membership is drawn from a wide cross-section of the communications industry, including carriers, carriage and internet service providers, content providers, search engines, equipment vendors, IT companies, consultants and business groups.
Its vision is to provide a unified voice for the telecommunications industry and to lead it into the next generation of converging networks, technologies and services. The prime mission of Communications Alliance is to promote the growth of the Australian communications industry and the protection of consumer interests by fostering the highest standards of business ethics and behaviour through industry self-governance. For more details about Communications Alliance, see www.commsalliance.com.au.
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