ACMA study into telco credit assessments shows positive results
The latest credit assessments mystery shopping study by the Australian Communications and Media Authority (ACMA) shows telcos are making good progress in implementing strengthened consumer protection measures.
Assessing ability to pay for a service is an important safeguard because it protects Australian consumers from committing to products and services they may not be able to pay for.
In February 2019 the Telecommunications Industry Ombudsman published a systemic investigation report that found telco sales practices can drive consumer debt. The report recommended the need for training in-store sales staff because financial over-commitment is a problem that can cause considerable consumer detriment. This recommendation is consistent with the findings of the ACMA’s study which highlights the need for improvement with in-store sign-up practices compared to online or telephone sales.
Ombudsman Judi Jones welcomed the overall positive result of the ACMA study but cautioned more work needed to be done to protect vulnerable consumers when signing them up in-store to products and services.
“Phone and internet are an essential service for most Australians, particularly in this time of uncertainty. We all rely on phone and internet to do our work and remain connected to family and friends. Phone and internet services are especially important for vulnerable people who additionally need their telco for the social services that assist their day-to-day living. Credit checking and assessing a consumer’s ability to pay for products and services can contribute to stopping the cycle of debt that arises from not being able to pay for what they’ve signed up to.
“The result of this study demonstrates Telstra, Optus and Vodafone have taken positive steps to ensure appropriate credit checking is completed during online and telephone sales. I encourage all telcos to ensure that before agreeing to sell a post-paid plan, they make reasonable enquiries about a customer’s financial situation and assess the customer’s ability to meet minimum charges over the plan’s contractual term.”
Notes to editors
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About the Telecommunications Industry Ombudsman
The Telecommunications Industry Ombudsman provides a free and independent dispute resolution service for residential consumers and small businesses who have an unresolved complaint about their phone or internet service.
Residential consumers and small businesses should contact tio.com.au or 1800 062 058.
The Telecommunications Industry Sector
Government and the regulators set policy and regulations for the telecommunications sector.
The Telecommunications industry regulators are the Australian Communications and Media Authority (ACMA) acma.gov.au Media enquiries to (02) 9334 7719 or firstname.lastname@example.org and the Australian Competition and Consumer Commission (ACCC): accc.gov.au. Media enquiries to 1300 138 917 or email@example.com. After hours 0408 995 408.
Communications Alliance is the peak body for Australian communications industry: commsalliance.com.au. Media enquiries to Sefiani Communications sefiani.com.au or 0431 478 558.
The Australian Communications Consumer Action Network (ACCAN) is Australia’s peak communications consumer organisation representing individuals, small businesses and not-for-profit groups as consumers of communications products and services, accan.org.au Media enquiries to 0409 966 931 or 02 9288 4000.
Acknowledgement of Country
The Telecommunications Industry Ombudsman acknowledges the traditional custodians of the land throughout Australia and their continuing connection to land, culture and community. We pay our respects
to Elders past, present and emerging, and extend our respect to Aboriginal and Torres Strait Islander Peoples from all nations of this land.