Telco service crackdown looms
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An industry-wide crackdown on poor consumer service in the telecommunications sector was announced this morning by the head of the Australian Communications and Media Authority, who says the industry was 'legendary' for poor complaint handling.
Chris Chapman also announced a major shake up of regulation in the industry, asking if providers still wanted to be self-regulated, if there should not be some consolidation of the industry bodies, and threatened to replace voluntary industry codes with mandatory standards if the ACMA was unsatisfied with an upcoming review of consumer protection codes.
"I am nailing the authority's colour to the mast. We are not waiting for anyone, anymore," he said.
A formal inquiry into customer protection in the telecommunications industry would start shortly, followed by possible regulatory reform with the ACMA emerging as a much stronger body with the potential to issue $2 million infringement notices, he said.
Speaking at the CommsDay summit in Sydney this morning, Mr Chapman announced a twelve month 'Reconnecting the Customer' campaign to tackle increasing complaints in the sector from "overly aggressive smart phone plans, an inevitable Wild West mentality when new opportunities spring up, [and] outsourced off-shore help desks".
"The first specific issue to be addressed is the poor responsiveness of industry to the concerns of its customers. The poor complaint handling of the industry is legendary," he said in a speech.
"I will personally brief CEOs of the larger service providers and ask for their support."
"As the learnings emerge from the inquiry, I will seek their collective agreement on enforceable strategies for lowering the number of complaints to the [Telecommunications Industry Ombudsman] about complaint handling."
In backing the ACMA's push for better consumer protection, Communications Minister Stephen Conroy told the summit he intended to give the regulator the authority to develop an industry standard - enforcable by fines - rather than the current approach of using less powerful consumer codes.
''Unlike a consumer code, a consumer protection standard will be developed by the regulator, who will need to balance the interests of consumers with those of the industry,'' he said.
''It will be directly enforceable by the ACMA and therefore, it will be a more powerful and flexible instrument.
''Failure to comply with an industry standard would be subject to civil penalty provisions.''
Companies that breach the standard will face fines of up to $250,000, while individuals will risk fines of up to $50,000.
The ACMA is responsible for regulating broadcasting, the internet, radio communications and telecommunications services in Australia.
The TIO is a consumer dispute service for telephone and internet customers with ongoing and unresolved complaints.
Mr Chapman cited premium SMS services as a poorly regulated service which had attracted a 'myriad' of consumer complaints and demonstrated how unsustainable the current regulatory environment was for new devices, mobile apps and billing systems.
A regulatory forum could reform the regulatory structure, Mr Chapman said, with the industry asked to reconsider the current regulatory 'alphabet soup' of associations, commissions and bodies, and also whether is really wanted to be self-regulated, or governed by voluntary codes.
The TIO should be given more powers to impose penalties, force providers to publish corrective advertising if they breach the code, or cancel memberships, Mr Chapman suggested.
Legislation on competition and consumer safeguards recently introduced by Communications Minister Stephen Conroy would give the ACMA the power to issues infringement notices and impose penalties of up to $2 million. This would cut down on court action, Mr Chapman said.
- with Ari Sharp