Failure to advise reasons for declining application for service

From time to time the TIO receives complaints about service providers rejecting applications for post-paid services after conducting credit assessments of potential customers. The customers may be confused as to why their application has been declined, e.g. they may believe that their credit rating is good.

A service provider is entitled to exercise control over its exposure to credit risk by declining services to those who do not meet its criteria. For this reason, the TIO does not generally investigate complaints where the available information suggests that the service provider based its decision both on accurate information and its own credit policy.

However, Clause 7.2.6 of the Telecommunications Consumer Protections Code, obliges providers to inform consumers:

1. whether the refusal to supply a service was based wholly or partly on information given to the provider by a Credit Reporting Agency (plus the name and address of that Credit Reporting Agency), and/or
   
   
2. if the provider has refused to supply a service for any other reason, the nature of the reasons for the decision.

Where a complainant claims that the provider just told them that they did not meet the company's requirements and did not give them any additional information, the TIO may investigate such complaints to determine why an application for service was declined. The TIO may also ask providers whether and how a customer might rectify any shortfall and successfully obtain a service from a provider if they were to resubmit their application or reapply at a later date.

First posted: 8 March 2005
Last updated: 4 August 2008