The Telecommunications Consumer Protection (TCP) Code came into effect on September 1. We look at what this means for telco customers and the possibility that less consumers could be subject to bill shock and subsequent credit rating defaults due to sky-high bills they had not budgeted for.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

Currently approximately 26% of our credit repair clients have suffered bad credit from telcos (telecommunications providers). Not all of that bad credit should be there. Whilst mistakes and mis-communications are frequent in the industry, as they are in many others – one of the major significant differences we have noticed with the telco industry compared with other industries issuing credit file defaults, is more clients are in dispute over excess charges.

Excess charges or “bill shock” can occur when the actual bill the customer receives is significantly higher than what they understand it should be. Issues like international roaming charges, excess data charges and customers going over plan allowances (especially when the plan had the term “cap” within it) seems to be a frequent source of dispute amongst customers.

Unfortunately sometimes the customer is unable to come to an agreement over these charges before they are issued with a credit rating default. These issues can be hard to fight. Often the customer will say what they had first understood the plan to be for, or what they wanted the phone to do, was not what eventuated.

Resolutions with telcos over these billing issues can be difficult to come to. Sometimes consumers have reluctantly paid the bill, thought the matter was settled, only to find they were defaulted anyway, and others have just refused to pay the bill until they got some resolution. Either way, customers have been faced with at least 5 years of bad credit from the episode unless they have been able to make a successful complaint.

The telcos – with all the power on their side can often come out on top.

Escalating levels of telco complaints in Australia, resulted in a major public inquiry by the Australian Communications and Media Authority (ACMA) and the report – Reconnecting the Customer. This examined the root causes of the industry’s poor customer service and complaints-handling performance. The telco industry was asked to regulate or be regulated – and so the Telecommunciations Consumer Protections (TCP) Code was developed by the Communications Alliance (CA), and a final draft was registered in late July.

That TCP Code came into effect on 1 September 2012. If the code proves to be effective, and if the ACMA does as it says it will and come down heavily on those that don’t comply with the TCP Code, there will be significant positive changes for telco customers.

What the Code provides for.

The ACMA outlines the basic benefits for consumers in its article Fair call—new telco code to benefit consumers. Here is a breakdown of consumer benefits of the TCP Code:

• Telco providers must be clear about what they are offering in their phone plans and stop using confusing terms like ‘cap’ (unless the offer refers to a ‘hard cap’—an amount that cannot be exceeded).

• Better spend management tools designed to avoid ‘bill shock’.Including improvements in billing processes and credit management, and the introduction of notifications about data usage and expenditure thresholds.

• From 27 September telcos will be required to provide unit pricing for national calls, standard SMS and downloading 1 MB of data in advertisements.

• From 1 March2013 customers buying a new service will receive a two-page document called the ‘Critical Information Summary’. This includes essential information about service, pricing and complaints-handling, as well as volumetric information so consumers can easily understand how many two-minute calls or texts they can make under their plan.

• Faster, better complaints-handling, with urgent complaints resolved within two days. All of these new measures will be monitored and the telcos subject to new benchmarking standards.

• For customers having difficulty paying their bills or meeting unexpectedly high bills, telcos must advise consumers about spend management tools, hardship advice and options to restrict a service.

• A new industry compliance body is being formed to ensure all industry participants comply with the new code.

According to IT Wire in its story New telco code toughens up consumer protections, Optus jumped the gun ahead of the introduction of the Code, and launched its new usage alert service which it says gives its customers greater transparency in managing spending on their mobile accounts. The new Optus service sends text alerts to Optus’ customers on most post-paid mobile plans when they reach 50 per cent, 85 per cent and 100 per cent of their voice, text and data allowance.

IT Wire also reports ACMA Chairman Chris Chapman as saying the ACMA will put the industry on notice, advising they would take a “far more robust approach” to ensure the industry’s compliance with the new Code and had “resourced up in this space.”

“We will conduct more audits and investigations dealing with key areas of consumer detriment and expect substantial changes in industry practices,” Mr Chapman says.

For consumers who consider that their service provider is not complying with the code, Chapman says they “may make a complaint to the provider in the first instance and if they are not satisfied with the resolution, they should contact the Telecommunications Industry Ombudsman.”

And, if telecommunications service providers do not comply with the code, Chapman says they faced a direction to comply from the ACMA, “while further breaches could lead to Federal Court action where civil penalties of up to $250,000 are possible.”

We will be following these telco improvements with great interest as they relate to the volume of credit file defaults due to telco customer service issues and bill disputes.

For those consumers currently facing what they consider to be excessive charges, or other issues with their telco which have resulted in bad credit – it is possible MyCRA Credit Rating Repairs may be able to help.

If a credit listing has been placed unlawfully, it may be required to be removed from the consumer’s credit file. Consumers can contact a credit repair advisor 1300 667 218 to assess their suitability for credit repair. There are no guarantees of success, but the specialised knowledge of credit reporting and industry law means engaging the services of a professional credit repairer gives the consumer the best chance of having bad credit removed completely and permanently from their credit file. Visit the main website for more information www.mycra.com.au.