A new "bill shock" code is set to save Australians $1.5 billion on our phone bills

A new "bill shock" code is set to save Australians $1.5 billion on phone bills.

Customer service in the telco sector may improve over the next two years thanks to a new code governing advertising, account management and complaint handling in a sector notorious for high complaint levels.

The Australian Communications and Media Authority (ACMA) yesterday agreed to register the industry's 2012 Telecommunications Consumer Protection Code (TCP) code, ending a stand-off between the two sides.

The ACMA had threatened to write its own rule-book if the TCP was too lenient and did not meet the recommendations of a recent inquiry into customer service.

Negotiating a satisfactory code had been a ''tense, tough battle'' between industry, consumer groups and the regulator, according to the ACMA's executive manager of content and consumer, Kath Silleri.

The ACMA's chairman, Chris Chapman, said he was ''optimistic'' the industry will improve and the new code ''re-empowers'' consumers. The 102-page code was written by peak-body Communications Alliance. It will be enforced by the ACMA from September 1 and phased in over the next two years.

From September next year, customers of all large telcos will receive warning messages when they have reached 50 per cent, 85 per cent and 100 per cent of their monthly allowance for calls, messages and data.

The word ''cap'' will be banned in advertising and standard charging information must be provided, along with a concise summary of what consumers are signing up for. Larger telcos must implement the changes by September next year, while smaller telcos have until September 2014.

A new body called Communications Compliance will be funded by the industry and will monitor compliance. It will require non-compliant telcos to submit an ''action plan'' outlining how they will better perform, but cannot issue fines or penalties.

Instead it will report any breaches to the ACMA, which can, for the first time, fine telcos for up to $250,000 in the Federal Court for breaches. And for the first time all telcos and internet providers will be covered by the code. Until now compliance has been voluntary.

The ACMA estimates it will cost the industry about $54 million to put the new code into place and about $102 million annually to fulfil obligations. About $90 million of this relates to the SMS alert-service.

Chief executive of Australian Communications Consumer Network, Teresa Corbin, welcomed the new code, saying: ''Informed consumers are good consumers. At this point in time consumers live in terror of big bills and live in terror of being caught in a long term contract. [We] are hopeful that its adoption will result in clearer advertising, easier comparison of products, better information about contracts and better tools to help consumers avoid bill shock.''