Liability for charges incurred by third parties

Introduction and scope

The Telecommunications Industry Ombudsman (TIO) receives complaints where an account holder disputes charges for services on the grounds that another party incurred those charges. For example, an account holder may claim that a family member or friend used their service without their knowledge or permission.

This position statement does not cover complaints where:

1. a consumer disputes excess internet usage on the grounds that a third party gained unauthorised access to their service by hacking or freeloading the service from a remote location. See the TIO’s position statement, Hacking or Freeloading
   
   
2. the charges in dispute are third party services that the account holder claims were requested by a person who was under 18 years of age. See the TIO’s position statement, Services provided to Minors

Our core position

It is the TIO's view that it is reasonable to assume that, as a rule, an account holder should be aware that a service may be used by other individuals if that service is located or left in an area to which other individuals have access.

It follows that an account holder should take appropriate measures to limit access to the service, or to certain features of the service, if they do not want other individuals to use the service or those features.

However, we also expect service providers to provide consumers with timely information about the options available to them to limit access to services. Further, these options should be effective in limiting access to services. In addition, on a consumer’s request, a provider should take action to limit access to services, if that action is within its power.

Examples of appropriate measures to limit access to a service may include:

1. a service provider activating exchange-based barring so that particular types of calls can not be made from the service, e.g. calls to long distance, international and premium-rate numbers - see ACMA factsheet on call barring
2. an account holder activating PIN- or password-based barring of a telephone or internet service - see ACMA factsheet on call barring.
3. account holder installing and maintaining an internet content filter
4. an account holder controlling children’s usage of a service

How we investigate complaints

When we receive complaints about charges incurred by a third party, we consider the particular circumstances of the complaint, e.g. the age of the third party, and seek answers to the following questions:

• Did the provider advise the consumer about their liability for the service and the potential for them to be exposed to financial loss? If so, what was that advice, and when and how did the company provide that advice?
  
  
• Did the provider advise the consumer about ways to limit access to their service? If so, what was that advice, and when and how did the provider advise the consumer?
  
  
• Where service barring options are available, was information about those options available to the consumer? If so, what was that information, and when and how did the company provide it?
  
  
• Was the consumer in a position to take reasonable action to limit access to their service? If so, did they take that action? If they did not take that action, why not?
  
  
• Where a consumer asked a provider to take action to limit access to services, was that action within the provider’s power and did it take that action?

In addition, in any given case involving disputed charges, the TIO will consider applying its position in relation to Unlimited credit - financial over-commitment.

Possible outcomes

If the information we collect indicates that a provider:

• did not give the consumer adequate or accurate information about their liability for the service, or
• did not give the consumer adequate or accurate information about how to minimise their exposure to financial risk by limiting access to a service or to features of that service, or
• did not, on a customer’s request, take action to limit access to a service or to features of that service, if taking this action was within its power,

we would generally take the view that it would be fair and reasonable for the provider to waive the entire amount of the charges.

Where the information we collect indicates that a provider has provided appropriate information and taken appropriate action, we would generally advise the parties that it would be reasonable for the consumer to pay the charges.

Some exceptions

Burglary

The TIO may take the view that it would be fair and reasonable for a provider to waive charges in circumstances where:

• the charges were incurred by a party who accessed the service illegally while the customer was absent from the relevant premises
• the customer can substantiate the crime, e.g. by providing a report from the police or a security firm, and
• the evidence indicates that the customer had taken reasonable steps to protect the security of their service.

Loss of a mobile telephone service

The TIO may take the view that it would be fair and reasonable for a provider to waive some or all disputed charges where:

• a customer claims that they lost or misplaced a mobile or other portable service, and
• the evidence indicates that the customer reported the loss to their provider as soon as practicable.

For more information, see the TIO's position statement, Stolen Mobiles.

Capacity

Where the circumstances of a complaint involve a claim about the account holder’s capacity to understand their liability and the risks associated with other individuals gaining access to and using their service, the TIO's position statement, Persons with intellectual disabilities entering contracts, may apply.

Last updated: 24 January 2008

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