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The TCP Code 2012 - minding and bridging the gaps

12 December 2012

The following is an extract of a speech delivered by Ombudsman Simon Cohen in October 2012 at the CommsDay Summit in Melbourne.

Outside the TIO, the importance of the Telecommunications Consumer Protections (TCP) Code in our day-to-day work may not be fully understood. The TIO has the power to receive, investigate, and help resolve consumer complaints that involve code-related matters. At all stages of a complaint, the TIO uses codes to help understand and resolve complaints.

But we don’t only use the Code when dealing with complaints. We also use it when conducting systemic investigations, providing information to service providers about the Code, and developing position statements about our approach to resolving disputes. Service providers, regulators and other bodies use TIO code data to monitor performance and improve industry practice.

We have and continue to develop a strong expertise in the Code, and as such, we have the opportunity to identify circumstances where it operates well or is deficient.

The new Code certainly promises to improve practices in the telecommunications industry and put into place a range of better protections for consumers. It includes a number of elements that are likely to reduce the possibility of consumer detriment in using telecommunications products and services. But for all of these and other improvements, there remain some significant gaps that the Code does not fill, that both consumers and service providers must be mindful of.

For example, under the new Code, providers will be required to provide spend notifications to many of their consumers when they reach 50, 85 and 100 per cent of their included expenditure or data allowance. However, these new rules don’t come into force until September 2013 (or in some cases 2014), they don’t acknowledge providers’ existing responsibilities, and they don’t apply to small business consumers or for international roaming, and as a result may not entirely end bill shock.

Another area where there are both substantial gains in the Code and yet some way to go is financial hardship. While a number of clauses in the Code deal with financial hardship policies there is very little detail about what best practice financial hardship policies should contain. The Code’s definition of financial hardship is quite narrow, and focuses on the causes as to why a consumer may not be able to pay charges, rather than the simple fact that due to circumstances of disadvantage some consumers cannot meet a telephone or internet bill.

The complaints handling chapter of the Code has also been substantially improved. However, its provisions apply inconsistently to common consumer concerns. For example, an initial call to report a fault or service difficulty is not considered to be a complaint unless the consumer specifically advises that they want the call treated as a complaint.

It is very positive to see a compliance chapter in the Code and concrete steps from industry to develop a proper compliance framework. However, many aspects of the framework, including funding, enforcement and independence, are not clear at this time. These will be critical to the effectiveness and reputation of compliance mechanisms, and to the effectiveness of the Code.

To the credit of the telecommunications industry, we have seen some providers move much quicker than required in implementing the new spend management rules and increasing the notice to consumers about potential international roaming charges. We have also seen the Minister for Broadband, Communications and the Digital Economy direct the Australian Communications and Media Authorities to develop an international roaming standard. The TIO is facilitating a financial hardship roundtable with consumer, industry, regulatory and policy stakeholders to develop a best practice framework for dealing with financial hardship related to telecommunication products and services.

Industry’s challenge is that the Code is not, and will not be, an immutable golden standard. Rather, the Code needs to be seen as setting a contemporary basic or minimum standard of practice. We hope that providers will strive to offer services above and beyond Code standards for reasons including those of competitive advantage and good corporate citizenship.

There is also a challenge for the TIO to strike the right balance when addressing these gaps. It is important that we take into account the substantial and ongoing investment of industry to meet the new Code rules. Equally, for areas that are not covered, not adequately covered, or are new, we will need to have an appropriate approach to dispute resolution that is transparent, consistent, reflects common sense and promotes fairness.

There is a challenge to all in the telecommunications industry to not be complacent now that the new Code is in place, but to look for opportunities to continue to develop good practice that not only benefits consumers, but builds the reputation of telecommunication companies as leaders in providing an excellent and safe consumer environment.

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