The Australian Communications and Media Authority has formally warned Dodo Services Pty Ltd (Dodo) about its compliance with the Telecommunications Consumer Protections Code (TCP Code).
The warning follows an ACMA investigation which found that the telecommunications service provider had failed to send alerts to customers about their data usage (as required by the TCP Code). The failure affected some 3,300 Dodo fixed broadband customers in October 2013 and nearly 2,000 fixed broadband customers during November 2013.
‘Dodo cooperated with the ACMA’s investigation,’ said ACMA Chairman, Chris Chapman.
‘Once its failure to send the alerts was identified in its response to the ACMA’s enquiries, Dodo worked swiftly to fix the information technology faults that had prevented the alerts from being sent. Dodo also compensated affected customers and had capped the excess usage charges,’ he said.
All telco providers must send usage alerts to customers on post-paid broadband internet plans when they have reached 50, 85 and 100 per cent of their monthly data allowance (unless the plan is for unlimited data, the data is ‘shaped’ or if usage is capped at 100 per cent).
The Dodo issue was the only one identified during an ACMA audit of seven large and medium telco service providers to assess compliance with the usage alert requirements, which were introduced in September 2013. All seven providers had begun offering usage alerts before they became mandatory and several offered customers flexibility about when and how the alerts are delivered.
‘It’s again heartening to see that industry is embracing these new rules and actively promoting spend management tools to their customers,’ Mr Chapman said.
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Media release 31/2014 - 18 June
Spend management alerts are one of the major improvements for Australian consumers in the new Telecommunications Consumer Protections Code (TCP Code).
The alerts were introduced following the ACMA’s Reconnecting the Customer public inquiry, which issued its final report in 2011.
The inquiry found that the root causes of the increasing complaints to the Telecommunications Industry Ombudsman to that point in time were consumer difficulty in understanding and comparing telco and internet plans and in monitoring their usage,
Rules that require telecommunications service providers to send spend management alerts (alert notifications) to customers commenced their roll-out on 1 September 2013. The changes require:
- Residential customers on post-paid mobile and internet plans (with the potential for excess usage charges) to receive updates when their data usage reaches 50, 85 and 100 per cent of the amount included in their plan.
- Residential customers of large providers with more than 100,000 included value plan services (Telstra, Optus and Vodafone) to receive SMS alerts when usage of their included value for calls and SMS reaches 50, 85 and 100 per cent.
Warnings at the 100 per cent usage threshold must also include details of excess usage charges which can be considerably higher than charges within a plan.
Plans or services that do not expose customers to the risk of bill shock are not required to receive usage alerts. These include pre-paid services, services that have a hard cap or are unlimited and dial-up internet. Internet services that are shaped, i.e. which slow data transfers rather than impose excess usage charges when customers reach their data usage limit, are also not included.
The final spend management alert element of the TCP Code rolls out from 1 September 2014 when customers of smaller providers (less than 100,000 included value plan services) will also receive voice and SMS usage alerts to accompany their data alerts.
The usage alert requirements follow other beneficial changes in the TCP Code including:
- the introduction of two-page critical information summaries, which allow consumers to more easily understand and compare products
- stricter rules on advertising, including the use of potentially misleading terms such as ‘capped’ and ‘unlimited’ offers
- improvements in complaint handling practices.
The ACMA is monitoring industry compliance with each of these elements closely and will not hesitate to take action in circumstances where compliance falls short.
Since the TCP code was registered in September 2012, the ACMA has:
- issued 110 formal warnings
- given 10 directions to comply
- issued 1 infringement notice.
The effectiveness of the new rules, industry’s general high level of compliance and the ACMA’s graduated approach to non-compliance is evident in TIO complaint statistics, which show that the number of TIO complaints per thousand services, decreased from 3.9 in 2011-12 to 3.1 in 2012-13 (a decrease of just over 20 per cent).