Telcos must implement "bill shock" prevention measures: ACMA

In its final report from its Reconnecting the Customer enquiry, the industry watchdog has recommended numerous changes to the TCP code by February 2012

ACMA chairman, Chris Chapman

ACMA chairman, Chris Chapman

Australian telcos must implement "bill shock" prevention measures in order for customers to better manage their usage and expenditure, the Australian Communications and Media Authority (ACMA) has advised.

The watchdog released the final report from its Reconnecting the Customer enquiry, which was first launched in April last year to pinpoint major issues between the customer and service providers. The final report recommends five key changes to be made to the Telecommunications Consumer Protection (TCP) code by February 2012.

“All providers should enable customers to track their usage and expenditure on data, calls and SMS during a billing period to help reduce the risk of bill shock," the report reads.

“Consumers should be equipped with the tools they need to manage their telecommunications expenditure, particularly the ability to monitor the accumulation of charges in a plan during a billing period.

“Requiring providers to include on bills a comparative pricing rate, based on the included value of a plan, should also improve consumer understanding of charging arrangements and bills.”

According to ACMA, service providers must offer tools to cover all components within a minimum monthly plan including a notification in the form of SMS or email to alerts consumers of their expenditure and usage at certain points such as 50 per cent, 80 per cent and at 95 per cent.

Telcos should also provide details about the expenditure and usage point reached and the consequences of exclusions, such as roaming costs.

“Service providers should also disclose a customer’s usage on all bills in a form that allows a customer to compare his or her actual usage over a period of time,” the report reads.

The report cites bill shock as a key area of consumer detriment, which is worsened by poor of customer care on the part of the telco, including a lack consumer understanding on how charges are levied and also around how those charges accumulate.

It also claims current online monitoring tools for consumers are unsatisfactory and are insufficient in preventing bill shocks, particularly for disadvantaged customers who are most likely to suffer the most from exorbitant bills.

ACMA chairman, Chris Chapman, said the report had numerous additional findings and recommendations in regard to consumer concerns about service providers.

“All providers should clearly disclose pricing information in their advertisements in a way that will make it easier for consumers to compare plans,” the report reads.

“Advertisements should no longer use words that could be confusing for customers.”

The report recommended all providers give customers a simple explanation of what is included in a plan, how bills are calculated and other essential information they need to know about the plan. Additionally, customers should be able to make comparisons between providers and industry should provide more information about their level of customer care with a focus on resolving customer enquiries.

Telcos should provide a standard complaints-handling process, the report reads, and ensure it meets benchmark standards and includes timeframes for dealing with a complaint.

“We have closely consulted on these outcomes with consumers and industry and the overwhelming response has been that improvements are both urgent and necessary,” Chapman said in a statement.

“The industry should address these concerns as soon as possible so the industry is now formally on notice to reflect these outcomes in the new TCP Code.

“If the industry doesn’t develop a code that addresses the ACMA’s concerns, the ACMA will mandate changes through direct regulation.”

ACMA's recommendations are in line with yesterday’s launch of Optus’ new international data roaming alert system.

The system will enable customers who have downloaded data on their handset while overseas to be notified within “approximately one hour of first usage” that they are being charged for data roaming. It also alerts customers who opt to continue roaming with notifications issued for every 15 Megabytes (MB) of usage as a further measure.

Optus also flagged plans for “the coming months” to launch a text-based alert for postpaid customers if they exceed 80 per cent of the value in their mobile plan, including voice, text and data. Customers will receive an alert if they spend $20 or more on services which aren’t included in their cap, such as international calls or premium SMS.

Follow Chloe Herrick on Twitter: @chloe_CW

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Tags Chris Chapmanbill shockACMAtelcosAustralian Communications and Media Authority (ACMA)

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