The Australian Communications and Media Authority has issued a Formal Warning to Exceed Connect Pty Ltd (Exceed Connect) for breaching the Telecommunications Consumer Protections Code 2012 (the Code) by transferring customers to it without their consent.
Chapter 7 of the Code sets out supplier obligations when customers change their telcos, including in the event of the sale or transfer of business operations of a supplier.
The breaches occurred when the customer base of Exceed Telecom Pty Ltd was transferred to Exceed Connect in the first half of 2015 after the company was placed in external administration.
The ACMA’s investigation focused on the experience of nine customers. It found Exceed Connect failed to obtain the required consent to transfer them from Exceed Telecom.
In addition, required information relating to these transfers was not supplied to the customers. Under the Code, details about the new supplier and the transfer process must be made available.
Further breaches occurred when some customers then attempted to transfer their services away from Exceed Connect to their preferred supplier but were taken back by the company against their will.
‘Suppliers need to ensure that their customers understand what is happening to their service, particularly who is providing it to them,’ said acting ACMA Chairman James Cameron. ‘This is especially important when companies are undergoing a reorganisation and transferring their entire customer base to a new entity.’
For more information or to arrange an interview, please contact: Blake Murdoch, on (02) 9334 7817, 0434 567 391 or firstname.lastname@example.org.
Media release 20/2016 - 14 April
The TCP Code
The TCP Code 2012 was registered on 1 September 2012, and included a number of new obligations on telco suppliers to give greater protections to customers from confusing mobile plans, bill shock and poor complaint handling practices. A refreshed TCP Code was registered on 3 December 2015 but this investigation was undertaken under the TCP Code 2012 which was registered at the time of the breaches.
The TCP Code 2012 delivered on the key recommendations of the ACMA’s Reconnecting the Customer report which proposed changes to make buying and using a mobile phone, or internet service, much simpler. Amongst these changes was the inclusion of spend management tools and alerts, which have had a positive impact for many consumers.
Clause 7.2 of the TCP Code 2012 requires gaining suppliers to use reasonable endeavours to ensure that a consumer is only the subject of a transfer if the consumer has provided their consent to such a transfer.
Clause 7.4 of the TCP Code 2012 requires that the consumer receives information about the gaining supplier and the transfer process at the time at which a transfer is proposed by the gaining supplier or is requested by the consumer.
Clause 7.11 of the TCP Code 2012 requires that, if a supplier proposes to transfer a customer’s telecommunications service as the result of a sale of the supplier’s business or a corporate reorganisation, the supplier must notify the customer in writing prior to that transfer being initiated. The supplier must ensure that that customer may terminate their contract for that service for up to five working days.
These provisions help ensure customers are fully aware of who is providing their service and consent to that supplier doing so.
In 2015, the ACMA became aware that the customer base of Exceed Telecom had been transferred to Exceed Connect, and Exceed Telecom placed under external administration. The ACMA requested information from Exceed Connect but initially received no response.
The ACMA then liaised with the Telecommunications Industry Ombudsman (TIO) to obtain details of customers who had complained to the TIO and conducted a number of interviews with customers and former customers of Exceed Connect. These customers note they did not consent to their services being transferred and were unaware that their services were being supplied by a new service provider.
Some of these customers noted that when they attempted to transfer their services away from Exceed Connect, their services were taken back by Exceed Connect against their will.