The ACMA has published the final report of its public inquiry into the customer service and complaints-handling practices of Australian telecommunications providers.
The report contains findings about the problems many consumers have when dealing with their provider and proposes
changes to industry practices in order to improve their experiences. This page provides a brief snapshot of the public inquiry, and our findings and recommendations.
Why did we decide to conduct a public inquiry?
The ACMA is a government agency that aims to make communications and media work in Australia's public interest. We are responsible for regulating the telecommunications industry. Telecommunications have become an essential service for many consumers. Most people have more than one communications product-a mobile telephone, a fixed-line telephone and internet access. This has meant that consumers are contacting their telecommunications provider more often and about more products.
However, many consumers are dissatisfied with their customer service experiences when contacting their provider. Over the last four years, complaints from consumers to the industry's complaints body, the Telecommunications Industry Ombudsman (TIO), have increased considerably. A large number of these complaints are about telecommunications providers' poor customer service and complaints-handling practices.
The high numbers of complaints suggest that there is a problem with how telecommunications providers treat their customers-that is, the quality of their customer care. Customer care includes the information received from a telecommunications provider about a product or service, how easy it is to contact them, how quickly they solve a problem (for example, with a bill), whether they do what they say they will, and how easy it is to make a complaint and have it resolved.
In April 2010, we announced the Reconnecting the Customer public inquiry to examine the causes of consumer dissatisfaction with telecommunications providers and to consider what changes might be required to improve the quality of customer care.
What did the inquiry find out?
We obtained information about consumers' experiences from the following sources:
- In 2010, we published a discussion paper asking a series of questions. We received 135 submissions, many of which were from individual consumers telling us about their experiences.
- We held five public hearings in metropolitan and regional areas of Australia at which consumers, consumer representatives and industry representatives gave evidence about customer care.
- We conducted a large market research project to explore consumers' experiences. This was done using 10 focus groups and a survey of consumers across Australia who have an account with a telecommunications provider.
Based on the information we collected, we found that, overall, many consumers are dissatisfied with their experience of customer care in the industry. This dissatisfaction occurs regardless of which service provider they are with and what products they have. Some specific problems we found are listed below.
- Customers find it difficult to contact their service provider, particularly by telephone. Common problems include being left on hold, experiencing long waiting times, not being able to speak to a real person, not being able to communicate easily with customer service representatives, having to repeat their story to each new customer service representative, having calls drop out, experiencing multiple transfers and not being able to speak to someone who can resolve their issue.
- Customers find it difficult to have problems resolved in the time they expect, especially for bills. Our research found that having a problem fixed within a reasonable time is very important feature of customer service that is driving dissatisfaction.
- Customers receive contrary and inconsistent advice about services. The large number of plans and products available, and the confusing way in which they are promoted, makes it hard for many consumers to understand the service they are buying.
- Customers frequently experience 'bill shock', which occurs when a consumer receives a higher than expected bill or sees their prepaid credit run down faster than expected. This appears to be commonly caused by either the consumer having a poor understanding of the charging arrangements for their service at the time they purchased it or because they are unable to track how charges are accumulating under a plan.
We identified that the main causes of these problems are:
- While most consumers see price as the main factor when choosing a service, the advertising and marketing of plans does not make it clear how prices inside a plan are calculated. In addition, marketing material often does not present information in a way that makes it easy for a consumer to compare it with other similar products. As a result, many consumers end up with a plan that is not the most suitable for their needs.
- Providers may use words such as 'cap' to describe a plan for which the advertised amount is, in fact, the minimum amount charged each month. This can be very confusing for some consumers.
- Products and services are becoming more complex. While some of this complexity is unavoidable, some is also generated by telecommunications providers, particularly with how they structure their plans and pricing.
- Consumers cannot compare the quality of customer care offered by different telecommunications providers before they choose a plan and so cannot use this as a basis for their choice. This means that they are often disappointed by the quality of customer care they receive after they have purchased their plan, particularly when they have a question or problem.
- Bills are linked to data usage, the number of calls and texts made, and call times. However, the way bills are calculated-and how charges add up-is often hard to understand and difficult to track between bills.
- In many cases, customer service representatives do not acknowledge when a customer is making a complaint or escalate it to the right staff member or team.
We are aware that some telecommunications providers are improving their systems and processes for dealing with consumers. These changes should make it easier for them to provide better customer service in the long term.
However, we think that telecommunications providers need to improve how they deal with consumers now. As a result, some changes will need to be introduced into the industry to make it easier for consumers to compare and choose the most suitable product.
What are our proposed changes and recommendations?
We are publishing a report that identifies the key areas in which we think changes are necessary to improve the way that the industry deals with consumers. Our views take into account the material and comments we collected during the inquiry, including feedback on the draft report that was published in June 2011.
The changes that we believe will help to fix the causes of poor customer care are:
- Clearer pricing information in advertisements-all providers should clearly disclose pricing information in their advertisements in a way that will make it easier for consumers to compare plans. Advertisements should no longer use words that could be confusing for customers.
- Improved information about plans-all providers should give customers a simple, standard explanation of what is included in a plan, how bills are calculated and what other essential information they need to know about the plan (similar to a 'product disclosure statement').
- Comparisons between providers-industry will be asked to provide more information about how good their customer care is, particularly how quickly they resolve their customers' enquiries. We also think that providers should have customer service charters.
- Tools to monitor usage and expenditure-all providers should enable customers to track their usage and expenditure on data, calls and SMS during a billing period to help reduce the risk of bill shock.
- Better complaints management-all providers should have a standard complaints-handling process that meets benchmark standards and includes timeframes for dealing with a complaint.
We have also recommended that improvements be made to the Telecommunications Industry Ombudsman (TIO) scheme.
How will these changes take place?
We have told industry what changes we think are necessary in order to address customer care problems and we have invited them to make the necessary changes in their self-regulatory code of practice, the Telecommunications Consumer Protections Code (TCP Code).
If those changes are not made, or we think that the changes made in the TCP Code will not lead to better customer care, we will consider other options. These include making rules that will apply to the industry in order to make sure that industry practices improve.
As of July 2012 the ACMA has agreed to register the package of reform measures put forward by the telco industry. This new code comes into force from 1 September 2012 and will be progressively phased in over the next 12 months.
Electronic copy of the issues paper and related research reports are available below:
More information about the scope of the inquiry can be found in the Reconnecting the Customer consultation paper (see above links).