Media Release

23 October, 2002
Ombudsman Launches 2001/02 Report Card on the Telecommunications Industry

The Telecommunications Industry Ombudsman received 62,275 complaints from consumers about telephone and Internet services last financial year - an overall decrease of 13% on the previous year.

The TIO's Annual Report for 2001/02, launched today, reveals a high level of consumer concern with poor customer service across all sectors of the industry, as well as with mobile phone contracts, unreliable Internet service and misleading advertising.

Billing disputes continued to be the most common cause of complaint, accounting for more than a third of total complaints to the TIO.

Ombudsman, John Pinnock, said the overall decline in complaint numbers this year did not necessarily indicate an improvement in service levels or in the internal dispute resolution processes of telecommunications companies.

"Complaints to the TIO may have declined, but complaints against the TIO's largest members, such as Telstra and Singtel Optus, have actually increased by 12% and 30% respectively," he said.

"Last year almost 20% of TIO complaints related to OneTel. The removal of these complaints may explain, at least in part, the decline in complaint numbers for 2001/02."

Mr Pinnock said the report showed improvement over the past year in some areas of the telecommunications industry, including in provision of service and customer transfer, but an overall decline in service levels.

"An increase in complaints about substandard customer service, including rude and discourteous staff and failure to follow up or respond adequately to customer complaints, shows that the industry has a long way to go.

"All service providers, regardless of size, must prepare themselves to deal with customer requests and ultimately customer complaints. If you plan to offer special deals to attract customers you've got to be prepared to cope with the demand," he said.

Mr Pinnock also launched The TIO's Guide to Complaint Handling, a booklet for TIO Member organisations, full of useful tips on effective complaint resolution. The booklet has been distributed to all TIO members.

Enquiries
TIO Public Affairs
Tel: 03 8600 8700
Emailtio@tio.com.au

From the TIO's 2001/02 Annual Report:

The TIO received a total of 23,652 enquiries and 62,275 complaints, comprising 70,234 distinct issues, in 2001/02. Most complaints were from residential consumers, 90.4%, and most, 92.9%, were made by telephone. The number of small business complainants is increasing, up from 6.4% to 8.7%.

• Complaints from NSW, Victorian and Queensland residents are decreasing, while complaints from South Australian, Western Australian and Tasmanian residents are increasing.

• The TIO now has 963 industry members, including 823 Internet service provider members. During 2001/02, 45% of TIO members had complaints logged against them. ¨ More than a third of complaints to the TIO related to billing. The bulk of these complaints related to disputed call or service charges.

• 29.1% of total complaints to the TIO concerned mobile services. The most common mobile service complaints, after billing, related to contracts and customer service. Most of the mobile contracts complaints related to the quality of advice given at the point of sale and misleading advertising.

• The imposition by mobile service providers of Early Termination Fees was an issue examined in detail by the TIO. The Ombudsman has formed a preliminary view that Early Termination Fees of a large fixed amount, said to be recoverable irrespective of the term of the contract left to run, should not be imposed on consumers.

• Internet-related complaints increased substantially in 2001/02, accounting for 13.5% of total complaints, with poor customer service a common concern.

• There was a dramatic rise in complaints concerning broadband data technology, with most complaints relating to reliability, speed or misleading advertising regarding download limits.

• Complaints alleging a breach of performance standards under the Customer Service Guarantee (a subset of provision of service and faults) increased substantially from 2,272 in 2000/01 to 2,743 in 2001/02.

Telecommunications Industry Ombudsman Complaint Statistics

In 2001/02 the TIO handled 62, 275 complaints comprising a total of 70,234 complaint issues.

TIO Case Studies

Disputed mobile phone call charges

A man disputed $822 worth of information (190) calls to an adult chat line that had been billed to his son's mobile phone. The man claimed that his son did not make the calls and it was a billing error on the company's part.

The TIO requested the company to provide call data demonstrating that the calls originated from the son's mobile phone, showing its unique identity features such as the SIM card number and the identifying number on the mobile phone handset (the IMEI number) as well as data showing the mobile phone tower that the calls passed through. The information provided allowed the TIO to determine that the charges were billed correctly and that there was no error on the part of the phone company.

Landline Disconnection

The complainant had moved into a property, but was unable to connect the phone as the line was still connected in the name of the previous tenants. The complainant had chosen a different provider to the one used by the previous tenants. The 'connect outstanding' procedure agreed to within the industry provides for 10 days for the gaining provider to liaise with the losing provider for disconnection of an existing service to allow for connection of a new service. As this time had elapsed the TIO intervened and requested that the gaining provider connect the service within 48 hours, and pay compensation to the complainant under the CSG for the four extra days that she had been waiting for the connection.

Mobile Contract

A father complained to the TIO that his eighteen year old daughter had been misled into signing a contract for a mobile phone. The girl had attended a dealership at the request of her friend - a seventeen year old, who had been advised that in order to purchase a phone she would require a person eighteen or over to sign the contract. In statutory declarations, both girls stated that the dealer had advised at the point of sale that the signature of the eighteen-year old was required purely for the purpose of verifying the younger girl's identity.

When the mobile phone was stolen the complainant's daughter was approached by a collections agency for charges amounting to over $700, the younger girl having failed to pay the accounts.

The TIO found that the complainant's daughter had effectively been asked to sign the contract as "guarantor" for the younger girl, although the contract itself made no provision for a guarantor. The TIO advised that, even leaving aside the claim that misleading or deceptive conduct occurred, on the grounds of unconscionability alone, the contract would not be considered binding at law. Further, the TIO found that it did not believe that it would be fair and reasonable for the company to pursue the complainant's daughter and directed it to waive all of the charges outstanding on the contract.

Mobile Number Portability

A man agreed to port his service between carriers in October 2001, but when he found that he was unable to get the handset he required, he cancelled his request with one company and ported to another instead. Some time later the man found he was unable to use his service and a message appeared on the screen advising that the SIM card was unregistered. The man went back to the dealer with whom he had cancelled the port authority and was advised that the service had been ported five months after the cancellation request. It took six days to have the service ported back to his preferred provider. The TIO requested compensation for the complainant from the gaining provider, the company responsible for the porting error.

For further media information, please contact TIO Public Affairs on 03 8600 8738 or 0403 601 532.

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