28 February 2013
Cutting the fine print: New information tool for telecommunications consumers
Consumers shopping for a new mobile plan or other telecommunications product will have access to helpful new information from tomorrow.
"Critical Information Summaries" (CIS) will provide shoppers with two pages of essential information about a product or service. This must include features, pricing, inclusions, exclusions and other key information such as access to dispute resolution procedures and warnings about international roaming costs.
For the first time consumers will be able to compare plans like for like, and choose the most suitable offer before entering into a contract. The CIS must be made available for free at point of sale or on the service provider’s website.
‘The Australian Communications and Media Authority expects a similarly high level of industry compliance with the CIS requirements as it has seen with the new advertising rules in the Telecommunications Consumer Protections Code,’ said ACMA Deputy Chairman, Richard Bean.
‘Industry has fundamentally changed the way it advertises telecommunications products and moved away from representations that confuse consumers,’ he added. ‘For example, we asked it to scrap the use of the word "cap" as well as stopping inaccurate use of terms such as "free" and "unlimited". The CIS is the next step in improving the telco customer experience.’
The ACMA will closely monitor industry’s compliance with the new requirement.
The CIS is another key response by the telecommunications industry to the ACMA’s Reconnecting the Customer public inquiry, which found many consumers did not have sufficient understanding of their telecommunications product before entering into a contract.
March 1 also sees the introduction of a new code requirement that bills for included value plans provide total charges for the last three billing periods. This will allow consumers to check if they are consistently exceeding their allowances and consider changing their plan.
An example of a CIS (PDF 1 mb) is available.
For more information or to arrange an interview, please contact: Emma Rossi, Media Manager, (02) 9334 7719 and 0434 652 063 or email@example.com.
In May 2010, the ACMA launched the Reconnecting the Customer public inquiry in response to record numbers of consumer complaints. At the same time, the peak telecommunications industry body, Communications Alliance commenced a review of its Telecommunications Consumer Protections Code (the code). The ACMA was an active participant in the code review.
In 2011, the final report arising from the Reconnecting the Customer inquiry made six key recommendations for change:
- stronger advertising rules including a requirement to advertise the cost of a standard (two minute) mobile call to assist consumers to understand and compare different telco offers
- better product explanations at the point of sale to assist consumers understand and compare telco offers
- mandatory expenditure and use management tools directed at preventing bill-shock
- tighter complaints handling
- the development of a customer care reporting framework
- changes to aspects of the TIO scheme.
The code contains important new features that align with the RTC recommendations including:
- a ban on confusing advertising terms like ‘cap’, where the ‘cap’ amount is a minimum rather than maximum spend (implemented in September 2012)
- a requirement for standard charging information to appear in most print and online advertising (implemented in October 2012)
- a requirement that consumers be given a ‘Critical Information Summary’, no more than two pages long, containing the key pricing and product information before they commit (implemented on 1 March 2013)
- a suite of tools to help consumers take control of their communications spend (for example, post-paid mobile users will get SMS messages telling them when they have reached spend points) (to be implemented on 1 September 2013 and 1 September 2014)
- internal telco complaints-handling procedures will meet the Australian Standard on complaints handling (implemented in September 2012).
While the new industry code is, in the first instance, self regulatory, any non-compliance gives the ACMA a trigger to direct service providers to comply with code obligations. If the provider fails to comply with such a direction, the ACMA can commence Federal Court proceedings for orders—including the imposition of a pecuniary penalty of up to $250,000.