ACIF Consumer Contracts Code

More than 20 million landline, mobile and internet contracts will be covered by the Australian Communications Industry Forum’s new Consumer Contracts Code, which was released in late February.

The code is awaiting registration by the Australian Communications Authority, which could then direct all telecommunications service providers to comply with its provisions or face penalties.

The TIO will have the right to investigate complaints which involves alleged breaches of the code.

ACIF says the code marks a world first, stopping a specific industry from imposing unfair or unintelligible contracts on consumers and small businesses.

The ACA requested ACIF to develop the Consumer Contracts Code in response to complaints that the wording of many telecommunications contracts was too complex, legalistic or technical for the average person to understand.

The other major source of complaints was contracts that allowed service providers to vary terms and conditions after customers had signed up for a service but didn’t offer customers an opportunity to terminate the agreement.

Any consumer or small business contract for telecommunications services entered into after the date of registration of the code must be made to comply within six months.

Existing contracts for fixed line phone services must also comply within that timeframe.

Where consumers have mobile phone or internet services without a fixed contract period, the provider must offer a new contract that complies with the code.

Board changes

Andrew Bedogni has replaced David McCulloch as the Optus representative on the TIO Board. Andrew has previously served on the TIO Council and is General Manager - Regulatory Compliance and Self Regulation at Optus.

Premium-rate SMS Complaints

The number of complaints to the TIO about premium-rate SMS messages has increased steadily since just before Christmas.

A common source of complaint relates to the frequency of the messages from some of these services, which include horoscopes, jokes and ring-tones.

Consumers are often unaware that they will continue to receive the messages and be billed on a per message basis until they request them to be stopped. As each message is billed at a premium rate, this can lead to unexpectedly high bills.

Complaints about these services often come from parents, as the advertising of the premium services, and sometimes the product - such as ring-tones – are particularly attractive to young people. Complainants may request premium-rate SMS services by responding to a television or print advertisement.

Some consumers who have brought complaints to the TIO say that they have been unable to cancel services through either their telephone provider or the provider of the premium service.

It is the TIO’s opinion that consumers should be able to stop receiving premium-rate SMS services by calling either the content provider or their normal mobile phone provider. Either party should be able to put a stop to the SMS.

In Britain, the mobile phone industry has moved to crack down on content providers sending unwanted mobile ring-tones.

The BBC’s news website says that a new industry code of conduct adopted by mobile phone operators requires that:

• consumers must be able to switch off the service with the universal “stop” command.
• when consumers sign up they must be told what they get, how much it costs and for what time period.
• consumers must get monthly reminders about the subscription and what it costs.
• consumers must get a reminder for every £20 they spend on ring-tones.
• content providers must place regular print advertisements spelling out prices, time periods and details of ring-tones offers.

The rules allow for offenders to be cut off if they do not let consumers know exactly what they get for their money and how to turn off the services.

At this time, there is no such regulation applied to content providers in Australia. Regulation around content provision, and m-commerce are currently key issues for discussion between government and regulators. The TIO hopes that the outcome of these discussions will assist in reducing the consumer detriment it has already noticed in the complaints it has received about premium-rate SMS.