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Positive indicators in 2020–21 telco customer financial assistance data

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A new report from the Australian Communications and Media Authority (ACMA) has found that more than 28,000 residential and over 2,000 small business customers entered into a financial hardship arrangement with their telco in the 2020–21 financial year.  

The data showed a decline in the number of financial hardship customers over the financial year, ending with 3.57 per 10,000 customers in June 2021. This number fell more than 50 per cent from a peak of 7.64 in June 2020.

The report also showed that more customers started with lower levels of debt compared to 2019–20.

For small business financial hardship customers, 48 per cent started with less than $500 debt, compared with 22 per cent the year before. For residential financial hardship customers, 62 per cent started with less than $500, compared with 48 per cent the year before.

The overall proportion of residential customers in a financial hardship arrangement who successfully exited that arrangement rose to 63 per cent in 2020–21, up from 47 per cent the previous year.

ACMA member Fiona Cameron said while the report shows some positive trends for the industry, telcos needed to focus on highlighting the existence of financial hardship arrangements and ensuring a better success rate for exiting such arrangements.

“Supporting customers experiencing financial difficulties includes understanding their circumstances and working with them to tailor a response that gives the best opportunity to stay connected,” Ms Cameron said.

“Telco financial hardship policies should be simple and very visible with disconnection a last resort.

“Telcos must highlight the options available when contacting customers and reassure them that their service will not be disconnected while they are paying off their debt.”

Nearly all (97 per cent) of financial hardship arrangements with residential customers involved a mobile service, with 75 per cent related to a mobile-only service, and 22 per cent related to both a mobile and a fixed service. 

“Being disconnected can make a tough time even worse, with access to phone and internet essential to everyday life. When customers are given the opportunity, they can pay off their debts and remain connected.”

The Telecommunications Consumer Protections (TCP) Code has rules for dealing with financial hardship customers and there are serious consequences for breaking them. Telcos face penalties of up to $250,000 for failing to comply with ACMA directions to comply with the TCP Code.

MR 04/2022

For more information, please contact ACMA Media on 0438 375 776 or media@acma.gov.au.

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