The Australian Communication and Media Authority has directed Tele-Talk Pty Ltd to comply with the Telecommunications Consumer Protections (TCP) Code after an investigation found the company misled customers, contravening multiple clauses of the code covering sales and transfer practices.
The investigation report found many of these contraventions were the result of sales representatives giving prospective customers unclear, inaccurate and ambiguous information. Tele-Talk led consumers to believe they were receiving a discount or reduction on their existing arrangements, rather than agreeing to sign up to a new service.
‘The TCP Code sets out what providers must do to properly obtain consent before transferring a customer’s service, said ACMA Chairman, Chris Chapman.
‘Providing misleading or inaccurate information in a sales pitch makes no sense. It’s a terrible way to begin a new customer relationship and, if you do obtain a customer’s agreement to switch based on misleading information, that’s no agreement at all.’
This is the third recent ACMA finding that a small telecommunications provider has failed to take adequate care around customer transfer processes arising from telemarketing calls to prospective consumers.
The ACMA has been engaging with a number of providers, following concerns expressed by the Telecommunications industry Ombudsman (TIO) about poor customer transfer practices and resulting detriment.
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Unauthorised transfer – what a consumer should do
If a consumer has been transferred to another provider without authorisation, the consumer should first contact that provider and lodge a complaint. The TCP Code requires providers to have a complaints handling process that is accessible, transparent and free of charge.
If a consumer is not satisfied with the way the provider has dealt with their complaint, the consumer may contact the TIO. The TIO scheme is a dispute resolution scheme for residential and small business customers established to provide free, independent resolution of complaints.
View further information about unauthorised transfers.
On 29 October 2014 the ACMA commenced an investigation into Tele-Talk’s compliance with the TCP Code. The investigation focussed on compliance with chapters 4 and 7 of the TCP Code. Those chapters deal with pre-sale information to consumers and customer transfers.
The ACMA’s investigation found that Tele-Talk breached 13 separate clauses of the TCP code on multiple occasions between 1 July and 30 September 2014. Specifically, among other things, Tele-Talk failed to:
- communicate its offers in a way that clear, accurate and not misleading on 19 occasions between 5 – 23 September 2014
- ensure its sales representatives promoted and sold its products in a fair and accurate manner between 1 July and 30 September 2014
- provide information about current products in a truthful manner without exaggeration or omission of key information that was reasonably likely to be important to consumers in reaching a purchasing decision in the circumstances on 19 occasions between 5 – 23 September 2014
- obtain consent in a fair and accurate manner and to use reasonable endeavours to ensure the consumer had consented to the transfer on 19 occasions between 5 – 23 September 2014.
The ACMA’s powers
Where the ACMA finds a breach of the TCP Code, it can:
- agree with the telecommunications provider on steps the provider will take to remedy the breach or improve compliance
- give a formal warning, or
- give a direction to comply with the Code.
The ACMA is not able to impose a pecuniary penalty on the telecommunications provider for such breaches. However, if a telecommunications provider, which has been given a direction, breaches that direction (for example, by contravening the TCP Code again), the ACMA can commence proceedings in the Federal Court seeking a pecuniary penalty.
Since the TCP Code was registered in September 2012, the ACMA has:
- issued 152 formal warnings
- given 28 directions to comply
- given one infringement notice for contravening a direction to comply.