Media Release

Thursday, 9 October 2003
Telco credit management practices remain a cause for concern

Download the complete release, including table of statistics (PDF format 153KB)

Consumer complaints about the credit management practices of telephone and Internet companies and their agents have continued to rise, according to figures released by the Telecommunications Industry Ombudsman today.

Mr Pinnock said complaints to the TIO about the debt recovery practices of telecommunications companies and their agents or factors had more than doubled since March 2002.

“In the three months from June to September 2003, the TIO received nearly 2,400 credit related complaints from residential and small business consumers,” Mr Pinnock said.

“More than 1,600 of these complaints were related to the debt recovery practices of providers, their agents, and more recently, debt recovery companies to whom telephone debts have been sold.”

TIO investigations to date have shown that:

• customers are being inappropriately default listed;
• previously waived debts have been factored and are being pursued;
• customers are sometimes unable to obtain itemised accounts showing total amounts owed and dates incurred; and
• a number of debt recovery companies, acting as agents or factors, are routinely failing to comply with telecommunications industry guidelines for handling customer complaints.

“I’m not suggesting for a moment that people should not pay their bills,” Mr Pinnock said. “But service providers have an obligation to consumers to ensure that debts referred or sold to specialist debt recovery companies are valid.

“And debt recovery companies, although not strictly a part of the telecommunications industry, have an obligation to ensure that they act in accordance with agreed industry standards when they act for telephone and Internet service providers.”

Mr Pinnock said the TIO would continue to work with its members to keep consumer detriment to a minimum but in the meantime offered the following tips to consumers approached by a telephone company, or its agent or factor, in relation to a debt.

• Ask to see a copy of the original itemised account showing the dates the charges are alleged to have accrued, the address at which the telephone service was provided and the telephone service number. This should give you an idea of whether or not the debt could be genuine.
  
• If you believe you do not owe the debt, advise the company of this and ask it to cease debt collection while the matter is under dispute. Then set about gathering information to support your case.
  
• If the debt is from a previous address several years ago and you dispute living at that address at that time, gather information to show where you lived. This can be in the form of a utility or council notice, electoral records, real estate records, a driver's license or anything else that shows that you lived somewhere else at the time. Most telephone & factoring companies have undertaken to waive debts where someone can show they did not live at the premises at the time the debt was accrued.
  
• If it's a debt from somewhere you did live, try and retrace payment details via your bank if you paid by cheque or credit card.
  
• Check the age of the debt, noting that in most states the statute of limitations is six years (but in the Northern Territory it is 3). Most companies will cease attempts to collect a debt that is outside the statute of limitations period and the TIO's position is that any such debts should be withdrawn.
  
• If you don’t think you’ll be able to pay your account on time, call your company straight away and discuss it with them. Don’t wait for the due date to arrive. If you address the problem before the account becomes due you will be in a better position to negotiate a fair and reasonable payment arrangement.

View Credit Control Complaint Statistics (Jan 1 2002 - Sep 30 2003) (PDF Format 51KB)

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