If you have received a TIO invoice in the past 12 months you may have noticed some variance in the total cost of a complaint. To give further transparency about this, the following additional information about TIO charges is provided.
The cost of an individual complaint consists of two elements: a volume fee and an operating cost fee.
- Volume fees reflect the direct dispute resolution staff costs of dealing with a complaint. These costs are generally set at the start of each financial year.
- Operating cost fees cover all other TIO expenses, which include support staff and service costs, accommodation, telecommunications, information technology, governance, member support and communications. Operating costs fees are calculated so as to recover only the actual costs incurred by the TIO, and charged on a proportional basis (i.e., based on a service provider’s proportion of the volume fees for any month).
This charging structure is mandated by the TIO Ltd Articles of Association. Our website contains more information on volume and operating fees.
During the past year, there have been a number of matters that have affected TIO complaint charges. Some of the most significant are outlined below:
Level 2 fee increase
As part of settling the budget of 2012-13, there was an increase the volume-related price of a Level 2 complaint from $280 to $300 in July 2012. This increase reflected increased dispute resolution staffing costs in dealing with these matters. All other volume fees remain unchanged for this financial year.
Decreased consumer demand
As noted in the 2012 Annual Report, consumer demand for TIO services has declined since April 2012. This has had a direct impact on the cost per complaint because as demand drops, the TIO operating cost fee is calculated over a smaller number of complaints. Because there are fewer complaints, members who receive a complaint will incur a higher proportion of the operating costs.
RADaR – the TIO’s new complaint management system
The TIO implemented a new complaint management system, RADaR, in 2012. RADaR is our primary business system. The project to deliver RADaR started in 2009-10; it was considered absolutely essential as RADaR replaced a decade-old system that was not properly supported, and could not effectively meet the needs of the TIO or its stakeholders into the future.
The costs for RADaR have been and will be, for the most part, spread over a number of years to reduce their impact on TIO charges. While this will minimise the cost of the project in any one billing cycle, it has contributed to an increase in operating costs.