Systemic issues

IMPORTANT NOTE RELATING TO HUTCHISON 3G AUSTRALIA PTY LTD

In the TIO’s 2008 Annual Report we incorrectly published a case study relating to Hutchison 3G Australia Pty Ltd about ‘non-application of bonus credits on pre-paid mobile services’. As we did not formally investigate this complaint under our systemic procedure, the issue should not have been included in the case studies presented.

Our powers to invetsigate systemic issues

Our constitution provides special powers to investigate complaints that are systemic in nature. Clause 5A of the
TIO Constitution defines a systemic problem as:
‘… a problem with or the failure of a system, process or practice of a member that causes detriment (that is not trivial) to a significant number or a class of end-users of a carriage service and which arises from a complaint that is within the jurisdiction of the TIO…’

During 2008/09 we did not raise any formal systemic investigations. However, a number of potential systemic problems were raised and resolved with members.

The case studies below are examples of issues we looked into during 2008/09.

Back billing of charges

We were made aware of an issue where a number of consumers were being billed for charges and line rental which were incurred more than 190 days before the bills were issued. Under the Telecommunications Consumer Protections Code providers must not bill for charges older than 190 days.

Where charges are billed over 190 days, we expect that the provider will waive them.

The TIO raised a concern over this billing practice with the provider and was told that the delayed charges were caused by processing problems relating to its call detail records. We were informed that a manual processing problem caused the delay in the charges. The provider said that in order to resolve the issue it had changed its billing process from manual to automatic. Further, the provider agreed to waive any charges billed over 190 days. The TIO also asked the provider to consider any financial hardship issues associated with any charges billed close to 190 days and the provider agreed to do this on a case-by-case basis.

We closed the potential systemic problem when we were satisfied that there were no further incidences of back billing and were satisfied that the member had adequately resolved the issue. We also recorded a breach by the member under the back billing provision in the Telecommunications Consumer Protections Code.

Advice at the point of sale about early termination fees

We received a number of complaints from consumers approached by a sales company which was acting on behalf of a telecommunications provider (the Telco). The TIO was informed that the sales company was telling consumers that if they transferred their service to the Telco, it would pay any early termination fees they incurred from their previous service provider.

The TIO was made aware of a dispute between the Telco and the sales company acting on its behalf, which resulted in the Telco not immediately paying the early termination fees it had promised to pay. As a result of this dispute and the associated delays, various service providers had begun taking credit management action against the customers who had transferred their services to the Telco.

In cases like these, the TIO’s position is that a telecommunications provider is responsible for any representations made by sales companies acting on its behalf. The TIO explained this position to the Telco, and after some discussions it agreed to pay all of its customer’s outstanding early termination fees. The Telco also agreed to allow consumers to terminate their contract without financial penalty, due to the advice they received when they initially agreed to transfer their service to the Telco.

Withdrawal of a rate plan feature

A potential systemic problem was brought to our attention when a consumer complained about a provider suddenly withdrawing a specific call plan feature because they had exceeded the threshold of a fair use policy. The consumer claimed that they were given little warning of the provider’s decision to withdraw the call plan which resulted in the consumer getting a significantly higher bill.

The provider argued that it was able to change a plan due to its fair use policy but the consumer argued that they were not aware of this policy and in addition were not warned of the rate plan feature being withdrawn prior to it being withdrawn. The TIO raised a number of concerns with the provider about how it advertised the fair use policy to its customers as well as issues relating to procedures for withdrawing the call plan feature. The provider agreed to make some changes to its policy, including putting in place a notification process which involved sending out warning letters to customers as well as educating its customers about the rate plan feature and including details
of the plan’s threshold in its terms and conditions.

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