Responding to customers
in financial hardship:
Principles and practices for telecommunications providers
March 2014
Contents
Message from Communications Alliance 4
Message from Financial Counselling Australia 5
Message from the Telecommunications Industry Ombudsman 6
1. Statement of intent 7
2. Purpose and objectives 7
3. Governance 8
4. Scope 8
4.1 Financial hardship 8
4.2 Essential telecommunication services 8
4.3 Application of this document to a diverse telecommunications industry 9
5. Principles 9
Accountability 9
Accessibility 9
Fairness 9
Flexibility 9
Mutuality 9
Proportionality 10
6. Key practices 10
6.1 Identifying financial hardship 10
6.2 Accessibility 10
6.3 Assessment and decision-making 11
6.4 Customer protections 12
6.5 Organisational arrangements 12
6.6 Relationships with third parties 12
6.7 Success measures 13
Attachment A: Chronology of the Principles and Practices document 14
Attachment B: List of organisations and persons involved in the Working Party
to develop the Principles and Practices document 15
Facilitation Team 15
Attachment C: Relevant extracts of financial hardship rules in the
TCP Code 2012 17
Attachment D:Concordance table – TCP Code 2012 and the
Principles and Practices document 20
Message from Communications Alliance
Telecommunications were historically regarded as just another “utility” – a service in the same category as access to electricity, gas and water – necessary to maintaining a modern and comfortable standard of living.
The communications revolution of the past 30 years has, however, transformed the impact that communications technologies have on the lives of modern Australians, and the importance of such access to an individual’s ability to engage with their community, care providers and governments, and to participate equitably in the opportunities and benefits of today’s society.
This transformation underlines the need for telecommunications service providers to pay ever-
closer attention to the needs of customers experiencing financial hardship – whether this is a temporary or persistent difficulty.
Measures to assist low-income Australians to stay connected have been in place for many years and many Australian telco providers have responded creatively in this area; seeking ways to understand better the plight of those experiencing financial hardship and how service provider and customer can work together to keep connectivity alive while managing and meeting obligations on both sides of the equation.
Industry worked closely and successfully with financial counsellors and other consumer representatives recently to produce an upgraded and comprehensive set of financial hardship management obligations that telecommunications service providers are required to meet. These are contained within the Communications Alliance Telecommunications Consumer Protections (TCP) Code 2012 – a code that is registered and enforceable by the industry regulator, the Australian Communications and Media Authority (ACMA).
This document is the product of an energetic collaboration by financial counsellors, consumer representatives, the TIO and industry players. It is not designed to create additional rules for consumers or the industry, but rather to help all stakeholders better appreciate the tools and practices they can potentially draw on to create positive, sustainable outcomes for the many Australian communications customers who find themselves in tough financial situations.
John Stanton
Chief Executive Officer
Message from
Financial Counselling Australia
There is a wise saying that a conversation is simply a search for common meaning. If there is a theme that sums up these guidelines and the process that led to them, it would be about our search for common meaning – and the many conversations that led us here.
At its essence, this document changes the conversations between telcos and customers in hardship – and changes them for the better. The principles and practices represent a major leap forward, setting out examples of best practice. They have the potential to fundamentally change the way the telecommunications industry responds to customers in financial hardship.
The same search for common meaning was evident in the process that led to the development of the guidelines. The telecommunications industry, financial counsellors and consumer advocates all started with the same premise: that we wanted to improve responses to customers in financial hardship. But good intentions are not enough. We needed to listen to each other and that took some time, and some give and take. As our conversations continued, the document slowly took shape.
What is important for the future is to continue the productive working relationship that has developed during the development of this particular document.
We will want to talk more about this document – because it is meant to evolve and change over time – but also about myriad other issues affecting consumers and telcos. We look forward to these conversations.
It is also important to acknowledge the invaluable facilitative role played by the TIO. Apart from their great patience, the clarity of the document, and its plain English style, is a testament to the skill of the TIO drafters. They managed to take the gist of a rough idea in a meeting and turn it into elegant English on a page.
As a final comment, it is worth coming back to the people this document is designed to assist: people who want to pay their bills, but are struggling to find a way. Every day, financial counsellors assist thousands of Australians in this situation. Most people will have debts with many creditors, including banks, utilities and telcos. They will generally also be under significant stress and sometimes even suicidal. Financial difficulty doesn’t come all nicely wrapped up in a box, so that you can deal with it alone. It affects physical and mental health, relationships with partners and children. What matters most is listening and treating people with respect. When we change the conversations, we change the outcome.
Fiona Guthrie
Executive Director
Message from the Telecommunications Industry Ombudsman
Financial hardship is an apt description of the day-to-day reality for many in our community. For these Australians, because of their poor financial position, life can be very hard. They may not be able to afford the basic necessities – for both themselves and those who rely upon them. They may be stressed by bills they cannot pay. And they may be excluded from engagement in their community at every level.
The purpose of this document is simply stated: to enable customers who are experiencing financial hardship to stay connected to essential telecommunication services while assisting them to meet their financial obligations. It is a purpose that seeks to give life to an intention of responding effectively, flexibly and compassionately to the circumstances of any telecommunications customer who is in financial hardship. It is also a purpose that reflects how critical access to telecommunications has become for every member of our community.
It is perhaps counter-intuitive that responding effectively and appropriately when consumers are in financial hardship is potentially good for an organisation’s bottom line. However, this is something I have heard again and again from business people who are expert in this area. That it is also the right thing to do, though, strikes a strong chord with an Australian community committed
to a fair go.
My office has been pleased to facilitate an ongoing discussion between representatives of the telecommunications industry and consumers to develop this principles and practices document for responding to customers in financial hardship. A series of roundtables, forums and workshops have allowed the exchange of ideas and examples to inform what is a flexible and achievable set of principles and practices. I encourage every telco to take up the challenge the document presents, and to think carefully about how their business might better assist customers in financial hardship.
We have committed to facilitate a further workshop after 12 months, so that telcos and those who represent consumers in financial hardship can review the impact of the document. I am more than hopeful that we will be able to report, at that time, measurable success.
Simon Cohen
Telecommunications Industry Ombudsman
1.
Statement of intent
Australian telecommunication service suppliers and consumer representatives intend that the telecommunications industry should respond effectively, flexibly and compassionately to the circumstances of any customer who is in financial hardship. Managing situations where a customer is in financial hardship effectively and appropriately is not only potentially good for the supplier’s business, it is the right thing to do.
Responding to customers in financial hardship: Principles and practices for telecommunications providers (the document) reflects this statement of intent. It has been developed through a collaborative process by service providers, consumer advocates, financial counsellors and others involved in the telecommunications industry, and facilitated by the Telecommunications Industry Ombudsman. An overview of the development of the document is set out in Attachment A. The organisations and persons who
have participated in the development of the document are noted in Attachment B.
The document reflects a shared view of recommended principles and practices that suppliers may use when dealing with consumers in financial hardship.
The document complements protections already provided for in the Telecommunications Consumer Protections Code 2012 (the TCP Code 2012) that address some aspects of financial hardship. These protections include rules about:
· credit assessment at point of sale
· spend management tools and notifications designed to reduce the prospect of unexpectedly high charges, and
· simpler and more comparable information that can assist consumers select the most appropriate plan for their circumstances.
The document also provides clarification and amplification of the requirements of the sections of the TCP Code 2012 (shown in Attachment C) that specifically deal with financial hardship.
The document is designed to further promote an appropriate supplier response when an existing customer is experiencing financial hardship, by providing for additional activities that will assist consumers to stay connected while meeting their financial obligations to the supplier.
The document further recognises the importance of access to essential telecommunication services for all Australians.
The document will be reviewed regularly by the organisations and persons named in Attachment B.
2.
Purpose and objectives
The overall purpose of the document is to enable customers who are experiencing financial hardship to stay connected to essential telecommunications services while assisting them to meet their financial obligations.
The specific objectives of the document are to:
1. Advance a progressive approach within the Australian telecommunications industry to assist residential and small business customers to meet their financial obligations while maintaining access to essential telecommunications services.
2. Provide guidance to suppliers about good principles and practices for dealing with customers in financial hardship, which apply and build upon the service standards required by the TCP Code 2012.[1]
3. Ensure such principles and practices are applied irrespective of the cause of the customers’ financial hardship, or their cultural or linguistic background.
4. Offer guidance about what might be included in a supplier’s financial hardship policy.
It is not intended that customers, including those in financial hardship, will have ongoing access to telecommunications services that they cannot afford and do not pay for.
3. Governance
The governance arrangements that relate to the document and its application are as follows:
· This document illustrates examples of best practice. All suppliers are encouraged to review the document to consider how relevant principles and practices can be adopted in their own businesses.
· Communications Alliance (CA) will consider the principles in the document in developing any guidance note to assist suppliers in meeting their financial hardship obligations under the TCP Code 2012. The document will also be considered in any future review of the TCP Code more generally.
4. Scope
4.1 Financial hardship
The TCP Code 2012 defines Financial Hardship to mean a situation where:
a) a customer is unable to discharge the financial obligations owed by the customer under their customer contract or otherwise discharge the financial obligations owed by the customer to a supplier, due to illness, unemployment or other reasonable cause, and
b) the customer believes that they are able to discharge those obligations if the relevant payment arrangements or other arrangements relating to the supply of telecommunications products by the supplier to the customer are changed.
However, the situation defined in the TCP Code may not be the only reason a customer cannot discharge their financial obligations. Other reasons may include:
· the customer may receive a telecommunications bill that is higher than they are expecting and that they cannot immediately afford, and they may require additional time to pay
· the customer may have a number of competing financial commitments that fall due at the same time, restricting their ability to meet existing financial commitments in a timely manner.
In addition, a customer’s financial hardship may be entrenched. For example, some customers have ongoing physical, mental, economic or cultural barriers that limit their ability to understand, enter into and/or manage financial commitments in general, which may place them in financial hardship.
It is intended that the document be of a broad application so that it applies to the range of financial hardship circumstances from customers who experience brief periods of financial difficulty through to those who have, and are likely to continue to have, restrictions in meeting their financial commitments.
Suppliers are encouraged to consider how their financial hardship policies are able to provide for a range of responses designed to assist all customers in financial hardship meet their financial obligations and stay connected to an essential telecommunications service. These responses may range from a brief and temporary intervention or activity, to a long-term or sustained effort to assist the customer.
4.2
Essential telecommunications services
The document aims to assist customers maintain access to essential telecommunications services. Essential telecommunications services may include:
· services that enable citizens to have contact with essential services, such as emergency services, health and community services and education services
· services that allow citizens to earn a living,
such as services used to conduct a business
or for paid employment
· services that allow citizens to participate meaningfully as members of a family, community
and society more generally.
What is an essential telecommunications service is not a static concept; it has and will continue to evolve as the community adopts and adapts to different ways of using telecommunications. It will also evolve in response to new product offerings from suppliers and the emergence of additional methods of accessing services.