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ACMA warns iiNet and Dodo about direct debit breaches

The Australian Communications and Media Authority has formally warned iiNet Ltd and Dodo Services Pty Ltd for failing to comply with the direct debit provisions of the Telecommunications Consumer Protections Code (TCP Code).

The TCP Code requires providers to comply with a customer’s authorisation when offering a direct debit payment facility. This includes cancelling an authorisation within three working days upon request and giving customers at least 10 working days to check their bill before the direct debit transaction occurs, unless the customer and provider have agreed on a different timeframe. In addition, providers are not permitted to take credit management action in relation to a disputed amount.

The warnings were issued after separate ACMA investigations.

The ACMA found that Dodo Services:

  • did not comply with a customer’s authorisation regarding direct debit on 12 occasions between June and September 2013
  • did not cancel a direct debit authorisation within three working days on seven occasions between December 2012 and September 2013.

The ACMA found that iiNet:

  • did not comply with a customer’s authorisation regarding direct debit on four occasions between June and August 2013
  • did not cancel a direct debit authorisation within three working days on three occasions between June and September 2013

  • did not allow customers at least 10 working days to check their bill before the associated direct debit occurred on 96 occasions during July 2013

  • took credit management action on a disputed amount on five occasions between June and October 2013.

‘Many providers are now offering services to customers on a direct debit basis only. Those providers need to understand that it is critically important their direct debit practices comply with the TCP Code’, said ACMA Chairman Chris Chapman.

Since the investigations, Dodo Services and iiNet have both taken action to ensure direct debit related breaches do not recur.

These investigations form part of a series in which the ACMA has been targeting providers’ direct debit practices.

For more information or to arrange an interview please contact: Emma Rossi on 02) 9334 7719 or media@acma.gov.au.

Backgrounder

All telecommunications providers are required to comply with the TCP Code.

The TCP Code was registered in September 2012 and resulted in a number of new consumer protections, many of which were aimed at addressing key areas such as bill shock and confusing phone plans. Key protections include the critical information summaries which allow consumers to more easily compare products, and the introduction of notifications about data usage and expenditure thresholds.

The TCP Code has also resulted in faster and better complaints handling by providers, with urgent complaints to be resolved within two days. 

The TCP Code also includes a number of requirements specific to providers offering direct debit as a payment facility, including that providers must:

  • comply with the customer’s authorisation
  • ensure that the customer can access all billing information on request and before the direct debit occurs

  • ensure that the customer can, on request, verify that its direct debit arrangements are in accordance with their authorisation.

  • allow the customer not less than 10 working days to check the bill or if no bill is required, all applicable charges, before the associated direct debit transaction occurs, except where the customer and provider have agreed on a different timeframe, or where the customer’s charges are for the same fixed amount in each billing period, or in respect of a pre-paid service

  • ensure that a customer can readily cancel a direct debit authorisation by providing a simple mechanism (such as email or fax)

  • cancel a direct debit authorisation within three working days of receipt of the cancellation request.

Providers must also not take credit management action in relation to a disputed amount that is the subject of an unresolved complaint where the provider is aware that the dispute has not been resolved to the satisfaction of the consumer and is being investigated by the provider, the TIO or a relevant recognised third party.

The registration of the TCP Code in 2012 followed the ACMA’s Reconnecting the Customer public inquiry which examined the causes of customer dissatisfaction with telecommunications providers. 

The last of the TCP Code requirements commenced this month, requiring all providers to send electronic notification alerts for voice calls and SMS within included value plans no later than 48 hours after the customer reached a usage level of 50, 85 and 100 per cent. Previously, only Optus, Telstra and Vodafone were required to send these to their customers.

The ACMA has an active TCP Code compliance and enforcement program. Since the TCP Code was registered, the ACMA has given:

  • 152 Formal Warnings to providers
  • 10 Directions to comply

  • one Infringement Notice for non-compliance.

Last updated: 24 April 2015

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