Reconnecting the Customer I Summary of proposed solutions

Lifecycle
stage Finding / Objective / Current regulation / Proposal / Regulatory mechanism / Preferred mechanism
Proposal 1—Improved advertising practices
Pre-sale—marketing and advertising / The TCP Code rules have not provided appropriate community safeguards for advertising practices. Advertising and marketing practices have contributed to consumer confusion about products, particularly when comparing and assessing the value proposition of different plans. / The ACMA expects that there be clear and enforceable rules that:
prohibit terms known to be confusing
require that representations about network coverage/broadband speeds can be substantiated
provide a reasonable basis for comparison, particularly for plans. / The current TCP Code has provisions for advertising (see 4.1.1). Those provisions do not require unit pricing or enable easy comparison of plans. / Require carriage service providers (CSPs) to disclose in advertisements about plans that are not subject to a hard cap or shaping, either:
an effective unit pricing rate and a stated unit pricing rate imposed for each component within the included value of a plan and if that included value is exceeded. The effective unit pricing rate is the amount the consumer actually pays under the plan (e.g. 300 minutes of calls ‘within a $29 plan’ would cost 0.10 cents). The stated rate is the rate that is charged for a call (e.g. 80 cents a call plus flag fall). The assumptions on which the effective rate is based must also be clearly disclosed
the volume of calls, SMS or megabytes a consumer would receive within the included value of a plan and if that included value is exceeded during standard peak times (based on an agreed common unit).
Enhanced rules about advertising practices should also be developed to meet the ACMA’s objective.
The comparative rate of charging should also be included in all bills. / In accordance with the current regulatory requirements, the ACMA proposes to invite industry to develop a code that requires CSPs to include a standard unit of effective pricing in all advertisements (in any media) and to include enhanced rules for advertising practices. / Industry agreement on disclosure of unit prices may be difficult to achieve. The ACMA is also aware that advertising practices that confuse consumers about charging arrangements within the included value of a plan are widespread. As such, a more effective intervention would be achieved through an industry standard.
Proposal 2—Improved product disclosure
Pre-contract inquiries / The TCP Code rules have not provided community safeguards for pre-contract information. Many consumers do not have sufficient information about, or a proper understanding of, their telecommunications product before they enter into a contract. This contributes to other problems such as bill shock. / The ACMA expects that there be clear and enforceable rules that require CSPs to provide to consumers comparable information about key features of products and aspects of a service before entering into a contract. / The current TCP Code has provisions for the delivery of information to a customer at the pointofsale (see 4.2.1). / Require CSPs to provide a critical information disclosure summary to consumers that:
gives consumers a summary of critical information about their product (e.g. term of the contract, maximum amount payable for early termination, minimum monthly payment)
is available for different types of products and provides critical information about those products (e.g. voice call costs, SMS costs, data use costs, exclusions)
provides consumers with non-product specific information (e.g. customer service contact details, access to spend management tools, cooling-off periods, access to internal and external dispute resolution). / In accordance with the current regulatory requirements, the ACMA proposes to invite industry to develop a code rule that requires CSPs to develop and maintain critical information disclosure summaries for products/services and to provide a copy of that summary to consumers before they enter into a contract. Such summaries are to be in a similar format and contain current information. / Industry agreement about consistent and meaningful disclosure of critical information, presented in a similar format, should be achievable. If an enforceable code was developed that met the ACMA’s objective, it considers that consumer outcomes would be improved.
If agreement was not possible, including agreement about the content and format of the summaries, the ACMA would consider it necessary to determine an industry standard.
Proposal 3—Performance reporting and customer service charters
Pre-contract inquiries / Giving consumers information about customer care performance is not a matter dealt with by an industry code. Consumers place a high value on timely contact resolution as an aspect of customer service that drives satisfaction. However, there is no transparency about the relative performance of CSPs on this matter.
A. / Better transparency around the relative quality of customer care, particularly CSPs’ ability to resolve matters quickly, will encourage competition. / The TCP Code, in its current form, does not require CSPs to measure or report on their customer care performance. / Require CSPs that have more than 30,000 (residential/small business) customers to report at regular intervals to the ACMA on:
Customer service performance
total number of contacts made by existing customers
number of repeat contacts made by the same customer within a 45-day period
and
Complaints-handling performance
total number of complaints received by a CSP
total number of that CSP’s residential and small business customers. / In accordance with the current regulatory requirements, the ACMA proposes to invite industry to develop a code rule that meets the ACMA’s objective and specifies a standardised, transparent and robust method of measuring customer care performance in a comparable way. / Industry is best placed to identify metrics that will measure timely contact resolution and complaints-handling performance. However, the ACMA also recognises that agreement on methodology for measuring metrics is critical if the performance-reporting framework is to be effective.
If industry agreement was not possible, the ACMA would consider it necessary to determine an industry standard.
Following on from the performance-reporting proposal, consumers have limited means to ascertain the standard of customer care offered by different CSPs.This precludes any meaningful comparison of service standards. / CSPs could develop and publish a customer service charter, with commitments to a common set of service standards and consequences (if any) for failure to deliver. Customer service charters would improve transparency and accountability, and encourage competition. / The TCP Code, in its current form, does not require CSPs to measure or report on their customer care performance. / Encourage CSPs toconsider publishing a customer service charter, which includes commitments to a common set of service standards and is presented in a common format by all industry participants. A charter could cover matters such as:
the channel(s) through which a customer can contact their CSP
what a customer could expect when making an enquiry using one of those channels, which might include, for instance, timeframes for first response and final resolution
the format of bills in terms of relevant information and level of detail
the availability of spend-management tools to enable customers to monitor their usage and financial exposure
what a customer can expect when they make a complaint (which might include, for instance, when a complaint will be escalated internally for resolution)
the contact details of the TIO. / The ACMA encourages industry members to consider developing customer service charters that containtheir commitments to a common set of service standards and consequences, if any, for failure to deliver on those commitments. / The development of customer service charters is a matter that is appropriate for industry consideration. However, the ACMA may consider inviting industry to develop a code rule requiring CSPs to develop customer service charters in order to improve transparency and encourage competition.
Proposal 4—Expenditure management tools
Post-sale issues / Consumers’ inability to monitor the accumulation of charges during a billing period is one of the causes of unexpectedly high bills. Many consumers do not understand their bills and charging arrangements. / Customers should be equipped with the tools they need to manage their own telecommunications expenditure and reduce the risk of bill shock. / The TCP Code, in its current form, does not require CSPs to offer tools to effectively manage expenditure. / Require CSPs to offer measures that allow customers to effectively monitor the accumulation of charges during a billing period, in real time. For products not subject to a hard cap or shaping, this should include:
an equivalent platform-based notification (SMS for phone, email for internet) that alerts consumers at either consumer-nominated or provider-specified expenditure/usage points (e.g. 80 per cent)
a consumer-nominated expenditure/usage point that cannot be exceeded without their express consent and includes notification at a particular expenditure/usage point
details about the expenditure/usage point reached, the consequences of any limitations and unavoidable exclusions (e.g. roaming costs).
As a transitional measure to encourage the development of tools, CSPs that do not offer spend management tools would be restricted from recovering an amount in excess of a specified figure in certain circumstances—e.g. 30 per cent over the minimum monthly payment or 30 per cent over the bill for the preceding quarter.
CSPs would also be required to include the comparable rate of charging on all bills. / In accordance with the current regulatory requirements, the ACMA proposes to invite industry to develop a code rule that requires CSPs to offer spend management tools for products that are not subject to hard cap or shaping, are available to consumers without charge and include ‘push’ options. / Bill shock is a key consumer detriment, particularly for disadvantaged consumers, and requires a consistent approach across the industry sector. The ACMA is concerned that an industry-wide approach to implementing effective spend management tools may not be achievable within a reasonable time. Accordingly, a more effective intervention would be achieved through an industry standard.
Proposal 5—Internal complaints-handling
Post-sale complaints / The TCP Code rules have not provided appropriate community safeguards for complaints-handling. / The ACMA expects that there be clear and enforceable rules about complaints-handling practices that set benchmarks across the industry and apply to all complaints from residential and small business customers. / The current TCP Code includes rules about complaints-handling processes. / Require CSPs to implement complaints-handling procedures that:
adopt the definition of ‘complaint’ as set out in the Australian Standard for Complaints-handling, AS ISO 10002-2006
comply with the guiding principles set out in the Australian Standard for visibility, accessibility, responsiveness, objectivity, charging, confidentiality, being customer-focused, accountability and continuous improvement
establish benchmarks forensuring timeliness in handling complaints; documenting procedures; and collecting, analysing and reporting complaints information. / In accordance with the current regulatory requirements, the ACMA proposes to invite industry to address deficiencies in the TCP Code to ensure that complaints-handling provisions provide appropriate community safeguards and CSPs’ practices are adequately regulated. / Complaints-handling is fundamental to a well-functioning market. It would be more effectively addressed if it was the subject of a service provider determination, which set out rules for complaints-handling procedures. There are stronger incentives for complying with a service provider rule because of the risk of significant pecuniary penalties for non-compliance.
A service provider determination could operate together with an industry code that sets out the requirements for CSPs to meet the minimum standards established by the service provider determination.
Proposal 6—Changes to the TIO scheme: governance, best practice standards and systemic issue reporting
External dispute resolution (EDR) / The current dual governance structure (board and council) of the TIO is not consistent with best practice for EDR schemes. / The ACMA wants to ensure that the TIO is aligned with best practice by restructuring it so that it has one overseeing body responsible for governance. / The structure of the TIO is not currently subject to regulatory oversight. / Recommend that the regulatory framework and/or governance framework of the TIO be amended to better align it with best practice for EDR schemes by creating a unitary governance model with one overseeing body, which would be responsible for:
appointing the Ombudsman
dealing with complaints about the TIO scheme
monitoring and reporting on trends and issues arising from complaints analysis
monitoring the reporting of systemic issues to regulators
monitoring the TIO’s capacity to manage caseloads.
Membership of the overseeing body would comprise equal numbers of consumer and industry representatives and an independent chair. / Changes to the governing structure of the TIO can be made by the board in accordance with the TIO’s constitution.
Changes could also be made through legislative amendment. / The ACMA considers that legislative amendment to require that the oversight of the TIO be formally part of the regulatory framework may have longer-term benefits. This is discussed below.
The TIO is unable to deal directly with members that do not comply with its determinations. / The ACMA wants to ensure that the TIO scheme meets best practice benchmarks and is able to deal directly with non-compliant members. Consumer protection standards would be enhanced by restricting CSPs that are not members of the TIO scheme from operating within the market. / Non-compliant CSPs must be referred to the ACMA, who will consider Federal Court action to seek the imposition of civil penalties. / Recommend that legislative amendment be considered to:
prohibit CSPs (that provide services to residential/small business customers) that are not members of the TIO scheme from operating within the telecommunications market
requireall CSPs that provide communications services to consumers to be a member of an EDR scheme that is approved by the ACMA and covers complaints made by retail customers in connection with a telecommunications product/service. Any such amendment should be considered in consultation with the TIO. The ACMA considers that, in the current environment, consumers are best served by having one EDR scheme (such as the TIO scheme) that deals with telecommunications products/services. Criteria to approve an EDR scheme should reflect the DIST Benchmarks for Industry-based Customer Dispute Resolution Schemes. / Changes to the TIO’s constitution to enable it to deal with non-compliant members directly. / The ACMA considers that legislative amendment prohibiting CSPs that are not members of the TIO scheme from operating within the telecommunications industry, together with a power to expel a member that did not comply with the TIO’s determinations, would enhance the consumer protection standards within the sector. Other changes to the legislative framework to require the EDR scheme in the telecommunications industry to be approved would bring the TIO into the regulatory framework.
The TIO’s processes for identifying and reporting systemic issues to the regulator do not meet best practice and should be improved. / The ACMA wants to ensure that the TIO scheme meets best practice. Improved systemic issue identification and reporting will benefit industry, consumers and regulators. / The TIO is not subject to regulatory oversight. The TIO’s procedures provide for systemic issue identification and reporting, but this is unsatisfactory. / Recommend that the TIO improve its systemic issue identification and reporting processes by:
widening the definition of ‘systemic issue’
removing any restrictions on the TIO’s ability to commence and conduct investigations about systemic issues
requiring regular reporting to the ACMA and/or the ACCC on systemic issues that are identified and confirmed within a particular period, together with details of any member that does not rectify a systemic problem to the satisfaction of the TIO
reporting on systemic issues in itsannual report, including the number of potential systemic issues identified, the number of confirmed and resolved systemic issues, and a broad description of the categories into which systemic issues fell during the relevant period. / Changes to the processes for identifying and reporting systemic issues can be made by the TIO. / Improved systemic issue reporting could be identified as a criterion that must be satisfied in order for an EDR scheme to be approved, if legislative amendment was considered appropriate.