Telco consumers will be better protected from financially over committing themselves and poor sales practices under new consumer protection rules approved today by the Australian Communications and Media Authority (ACMA).
A revised and strengthened Telecommunications Consumer Protections (TCP) Code requires telcos to promote and sell their products in a fair and responsible manner. The industry-developed Code also requires telcos to clearly explain key terms and conditions to enable consumers to make informed decisions and to assess a customer’s capacity to pay.
‘We see evidence of customers being encouraged to sign up to multiple plans which do not meet their needs, are excessive or beyond their financial capacity,’ said ACMA Chair Nerida O’Loughlin.
‘The impact of this is serious, particularly for those in vulnerable circumstances, leading to financial hardship and denial of access to critical services.’
For new customers on total contracts of more than $1000 (typically $45 per month), telcos will require customers to provide information about how they will pay their bill. Furthermore, an external credit check from a credit reporting body will be required. These provisions will also apply to pre-paid customers moving to post-paid accounts.
Compliance with rules governing sales practices, financial hardship and credit assessment is a priority for the ACMA in reducing consumer harm. The ACMA will be monitoring and investigating non-compliance and testing the effectiveness of the new rules.
Repeat non-compliance with the TCP Code can lead to significant consequences for those breaking the rules. Telcos face penalties of up to $250,000 for failing to comply with ACMA directions to comply with the TCP Code, and up to $10 million for failing to carry out the requirements of remedial directions.*
‘The new TCP Code puts the onus on telcos to ensure customers understand what they are buying. We will be subjecting telcos to close scrutiny as to how well their practices conform with the new Code,’ said Ms O’Loughlin.
Communications Alliance led the development of the new Code over the last two years with input from consumers, government and industry. It commences on 1 August 2019.
MR 23/2019 - 1 July
* Edited 2 July 2019 to update information about the penalties faced by telcos if found to be non-compliant.