TIO annual report 2007/08

Industry codes

On 19 May 2008 ACMA registered the Telecommunications Consumer Protections Code (the TCP Code), an amalgamation of all consumer codes. The objective was to ensure that definitions were consistent across all consumer codes and that consumers and industry had access to a “one-stop shop” of consumer rights and supplier obligations. Registration of the TCP Code was not intended to result in a change in obligations, rights or the scope of the individual consumer codes.

As the code was intended solely as an amalgamation of existing codes, and not a change to the scope of consumer or supplier obligations or rights, the TIO adopted a flexible approach to the recording of potential code-related issues and has not required that the complaint event occur after registration of the TCP Code in order to log a complaint as having a potential code-related issue. Potential code issues are only recorded for complaints investigated at level 1 and 2.

The TIO only records confirmed code breaches for complaints investigated at level 3 and 4. The TIO only records confirmed code breaches against registered codes. This means that when a new code is registered, the TIO will check whether a complaint event took place before or after the new code was registered. If a complaint event occurred before the registration of a new code, the TIO will not record a confirmed breach.

Code statistics

The TIO recorded 66 501 potential code issues, and 414 confirmed code breaches in 2007/08, a 22.8 per cent increase in potential code issues, and an 18.9 per cent increase in confirmed breaches from 2006/07.

These increases are reflective of the percentage increase in complaints in 2007/08, as well as a percentage increase in the number of formal level 3 and 4 investigations. As noted, the TIO only records confirmed breaches against complaints that have been investigated at level 3 and 4.

Complaints relating to operational codes did not contribute significantly to the total number of potential code issues or confirmed code breaches, accounting for less than 0.5 per cent of all confirmed breaches, and 1 per cent of all potential code issues.

Potential code issues

During 2007/08, the TIO saw a 22.8 per cent increase in the number of potential code issues recorded at level 1 and 2.

Table 23 Potential code issues

* These figures include complaints that were recorded while the superseded codes were still registered (before May 19 2008) and after the TCP Code was registered (after May 19, 2008).
^ Due to registration of the TCP Code, direct comparison of code clause numbers between financial years is not possible.

Potential Billing Code issues

89.8 per cent of potential Billing Code issues related to complaints from end users alleging that they were unable to identify what charges on their account were for and that the charges were levied for services they had not requested or used. The TCP code requires that suppliers must ensure that customers have sufficient information readily available to enable to them to verify the accuracy of charges.

The TIO recognises that the complexity of bills may contribute to consumers not being able to readily identify charges. It is the TIO’s view, however, that suppliers should ensure that bill clarity is not compromised by the inclusion of more billing information.

Potential Complaint Handling Code issues

66.9 per cent of potential Complaint Handling Code issues related to an alleged failure of suppliers to notify customers who were dissatisfied with the outcome of their complaint of other external avenues of complaint, such as the TIO. 14.2 per cent of potential code issues related to an alleged difficulty on the part of complainants to have their complaint escalated to a senior person at their supplier, despite specifically requesting that their complaint be escalated.

Potential Prices, Terms and Conditions Code issues

70.9 per cent of all potential Prices, Terms and Conditions Code issues related to the accuracy and quality of information provided by suppliers to a customer before the customer entered a contract. The nature of these issues raises a question as to whether the information provided to customers before they enter a contract is sufficiently accurate, current or relevant to the individual customer or gives sufficient advice as to the limitations of a service when the customer states the purpose for which they require the service.

Potential Credit Management Code issues

Potential code issues relating to Credit Management provisions have perhaps the largest mix of issues. A total of 22.2 per cent of code issues relate to insufficient notice from suppliers before restricting, suspending or disconnecting services. Under Chapter 7 of the TCP Code, as well as 5.41 and 5.6.1 of its predecessor, the ACIF Credit Management Code, suppliers are required to make reasonable attempts to inform customers of impending suspension/restriction/disconnection within certain timeframes.

16.3 per cent of potential Credit Management Code issues relate to complaints where a billing or service issue is identified after a debt has been sold or assigned to a third party. Under 7.4.14 of the TCP Code, the supplier must take all reasonable steps to resolve any billing issues that arise after the involvement of a third party.

Financial hardship policies are another source of complaint, contributing 11.9 per cent of potential Credit Management Code issues. Complaints may arise where suppliers appear to not have a policy, fail to advise customers of the policy, or fail to apply the policy to the individual circumstances of customers claiming to be experiencing financial hardship.

Potential Customer Transfer Code issues

55.7 per cent of potential Customer Transfer Code issues relate to claims from end users that their service was transferred without their consent. Under 8.1.3 (e) of the TCP Code, before effecting the transfer of a service, suppliers must ensure they obtain informed consent from the authorised customer or their authorised representative.

Confirmed code breaches

During 2007/08, the TIO amended the way in which it calculated the total numbers of confirmed code breaches.

Change in reporting of confirmed breaches:

Each confirmed code breach recorded by the TIO corresponds to a recorded complaint issue. For example, a Prices, Terms and Conditions Code breach may be linked to a “point of sale” complaint issue. In the past, if there were multiple confirmed breaches related to one particular complaint issue, only the first confirmed breach would be reported.

The TIO now reports on every confirmed breach related to each complaint issue. This has resulted in an increase in confirmed code breach numbers, as the TIO is now reporting on confirmed code breaches that it previously did not report. The increase is therefore to some extent due to the TIO improving its reporting of confirmed breaches. The TIO considers the new reporting is a more accurate reflection of industry’s performance against codes.

Table 24 Confirmed code breaches

* All of these breaches were recorded against the previous registered consumer codes, prior to the registration of the TCP Code. The TIO had not recorded confirmed breaches of the TCP Code as of 30 June 2008.

Complaint Handling Code

The Complaint Handling Code recorded the highest number of confirmed code breaches in the 2007/08, with 109 confirmed breaches, or 26.3 per cent of all confirmed breaches. 42.2 per cent were recorded against Clause 7.3.5, which requires suppliers to have appropriate methods and mechanisms in place in order to take action and monitor undertakings made to customers in the resolution of complaints. Confirmed breaches of this clause are normally recorded when a supplier gives a complainant an undertaking to resolve a complaint in a particular manner, but fails to action its undertaking.

Billing Code

23.4 per cent of all confirmed code breaches were recorded against the ACIF Billing Code. Of these, half were recorded against Clause 7.3.1 for a failure by the supplier to ensure that all charges are verifiable by the customer as being consistent with the supplier’s published or contracted prices, and what the customer has requested, used or contracted to receive. 19.8 per cent of confirmed Billing Code breaches were against Clause 7.2.1 which required a supplier to ensure the accuracy of its billing.

Prices, Terms and Conditions Code

A total of 56.7 per cent of all confirmed breaches of the Prices, Terms and Conditions Code related to the accuracy and quality of information provided by suppliers to a customer before the customer entered a contract. Specifically, 27.8 per cent of confirmed breaches related to the information provided to customers not being either accurate, current or relevant to the customer and their service (Clause 6.1.1). 28.9 per cent of confirmed breaches related to customers not being given sufficient advice as to the limitations of a service, despite the customer stating the purpose for which they required the service (Clause 6.5.1).

Credit Management Code

30 per cent of all confirmed breaches of the Credit Management Code were recorded against Clause 5.7.1 which prohibits a supplier from taking credit management action in relation to genuinely disputed amounts while the disputed amount is being investigated and remains unresolved by the supplier, the TIO, or a relevant recognised agency. The TIO is concerned that a number of suppliers may have systems that are incompatible with the requirements of this clause and will be seeking to work closely with a number of suppliers to ensure compliance in the coming financial year.

Customer Transfer Code

While we are encouraged by the decrease in confirmed breaches of the Customer Transfer Code, which fell from 42 in 2006/07 to 22 this year, we believe much of it is due to registration of the new Customer Transfer Code by ACMA on 5 July 2007. The code was in force for most of 2006/07, but our processes only allowed us to confirm breaches of a registered code. While the TIO investigated several complaints about the transfer of services at level 3 in 2007/08, many related to events that occurred before 5 July 2007 for which the TIO was unable to record a breach even where evidence supported a breach occurred.

A total of 36.6 per cent of all confirmed breaches of the Customer Transfer Code related to suppliers failing to obtain the informed consent of the authorised customer before a transfer took place.

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