Disgruntled NBN customers could be left without ombudsman's help
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Disgruntled NBN customers could be left without ombudsman's help

Consumers struggling with the switch to the National Broadband Network could be left without the ombudsman's help as part of a government proposal to restrict the Telecommunications Industry Ombudsman to "complex" complaints.

Handing some of the TIO's functions to a new External Dispute Resolution body is one of several proposals in a new Consumer Safeguards paper released on Thursday, which suggests limiting the ombudsman to complaints that customers and providers are deemed unable to resolve themselves.

There may be substantial changes to the way Australians' telco complaints are handled.

There may be substantial changes to the way Australians' telco complaints are handled.Credit:Glenn Hunt

Telcos are charged by the ombudsman for every complaint made by a customer to the TIO, even when the issues are referred back to the provider for resolution. This method of funding is a common gripe in industry circles, sources say, with some telcos describing it as "inefficient" and "unfair".

Consumer advocates, however, believe early access to the ombudsman is a powerful tool for customers.

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The paper also proposes the Australian Communications and Media Authority (ACMA) should collect complaint data from the new external dispute resolution body and providers. Currently, the TIO reports its own data.

Telco lobby group Communications Alliance chief executive John Stanton said many of the proposals are already in place, including a requirement for service providers to publish complaint handling policies and for the TIO to provide data to ACMA.

He rejected claims in the paper that the TIO was “controlled by industry” describing the ombudsman as “funded by industry fees” but “fiercely independent”.

He said the "cost and disruption inherent in dismantling the TIO and replacing it with a new body" needed to be considered.

A statement from a TIO spokeswoman said the “assertions and ideas set out in the paper need to be tested”.

“In particular, we will be testing the propositions that consumers (especially vulnerable consumers) will have the capacity to work with providers in the model being proposed, and that a new body is needed to achieve greater independence in dispute resolution,” she said.

'Fed up with poor service'

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Minister for Communications Mitch Fifield said in a statement that consumers were "fed up with poor service and inadequate safeguards when their telco fails to address a complaint".

"The vast majority of complaints received by the TIO are referred back to telcos to be resolved directly with the consumer," Senator Fifield said.

"Fewer than 10 per cent of complaints then come back to the TIO again. This raises an important question – why aren’t telcos resolving these complaints in the first place?"

He noted Australia's TIO had more than 158,000 complaints last year, compared to about 2000 to New Zealand's Telecom Dispute Resolution service and 9000 in Canada. In these countries, there is an external dispute process similar to that recommended by the proposals.

Australian Communications Consumer Action Network chief executive Teresa Corbin said the consumer lobby group ultimately wasn't bothered by who collected complaints data, as long as rigorous information on complaints was reported including from small providers, but took issue with any reduction to the TIO's powers.

"Telecommunications is a complex area that every consumer needs to engage with, none more so
than at the moment when the whole community is switching over to NBN-based services.

"The last thing consumers need is for avenues of independent redress to be reduced," Ms Corbin said.

'Similar level of discontent'

Looking to models in New Zealand and Canada would not make the Australian system better, she said, as the "reason they record so few complaints is because there are controls about what is defined as a complaint".

"Conversations I have [with telco consumer groups in New Zealand and Canada] suggest a similar level of discontent in both countries to Australia," she said.

A Vodafone spokeswoman said consumers should have access to "meaningful complaints data" to help them make informed choices about telco providers.

"Under the current model, consumers often don’t speak to their telco first about any concerns they may have. This often creates unnecessary costs, and inefficient back and forth between the TIO, telco and consumers," she said.

An Optus spokeswoman said the company was working with the government during the consultation process to "achieve more effective and streamlined regulations that will benefit customers", while a Telstra spokesman described the TIO as an "important body that has delivered benefits for customers in resolving complaints".

Jennifer Duke writes about media and telecommunications.

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