ACMA puts telcos on notice – improve in five months or face regulation

Telecommunications providers must inform customers when they are approaching limits on their bills and make it easier to compare offers from rival firms, according to the findings of an 18-month industry inquiry spearheaded by the Australian Communications and Media Authority.

The regulator has also given the industry a warning to shape up within just five months, or face more regulation and fines.

The report comes after months of hounding the telco industry over unsatisfactory consumer complaint levels, a problem which the Industry Ombudsman has pointed out several times on its own. Complaints have risen to 60,000 in the first quarter of 2011.

The new Reconnecting the Customer report lays down a harsh warning for telcos, with ACMA saying it is prepared to intervene.

“The ACMA is signalling its clear intent as to the changes that industry must make in order to improve customer care and address the underlying causes that have given rise to customer care problems within the sector.”

“The ACMA is giving industry five months in which to develop a revised code dealing with the matters that it considers must be changed.”

If the matters aren’t changed during that time, ACMA warns that it will intervene directly to implement its proposals through an industry standard.

The first of several proposals is that service providers be prohibited from using terms that are known to confused customers, and also states that a standardised rate of a two-minute call should be used to compare with rival plans. A metric of one megabyte of data, and the price of a text message, would also be used to compare plans.

This particular recommendation comes as consumers complain it is too difficult to compare value between different products.

ACMA also wants telcos to start recording customer care performance metrics, including the total number of contacts made by existing customers, and the number of repeat contacts made by those customers.

The regulator also wants a notification system that will tell consumers when they have reached specific usage points of their plans, with an alert at 95%. While telcos have told ACMA that some of this data could be old by the time it reaches the customer, the regulator still wants relevant information provided.

Telcos should also disclose customer usage on all bills, the report states.

“We have closely consulted on these outcomes with consumers and industry and the overwhelming response has been that improvements are both urgent and necessary,” ACMA chairman Chris Chapman said in a statement.

“The industry should address these concerns as soon as possible so the industry is now formally on notice to reflect these outcomes in the new TCP code.”

ACMA was contacted by SmartCompany this morning, but no reply was available prior to publication.

An Optus spokesperson said the company is committed to working with ACMA, and has been working on a review of the Consumer Protection code for some time.

“Optus is committed to providing our customers with a better experience and has a number of initiatives already in place, or in train, which will address some of the ACMA’s recommendations.”

The findings come after ACMA released a draft report earlier in the year outlining similar recommendations.