ACMA to tackle dismal customer service in telco industry

Watchdog launches inquiry into high number of complaints and will seek large telco support on enforcable strategies

The Australian Communications and Media Authority (ACMA) has moved to address the high number of customer complaints in the telecommunications industry, launching a formal inquiry.

In his speech at the CommsDay Summit in Sydney, the ACMA chairman, Chris Chapman, said the inquiry would determine “how consumer expectations of customer service might be satisfied in the NBN-delivered broadband world”.

“Many would share the ACMA’s concern about whether the current arrangements which underpin telecommunications consumer protection are really effective in dealing with the issues that concern consumers most,” Chapman said.

"The trend-line growth and sheer quantum of complaints about complaint handling and customer service — up to 900 every working day — reflects poorly on the entire industry. Whether this is evidence of a failing regulatory system or just a perception of that failure, I now believe this issue has to be confronted directly and urgently otherwise we will be talking about these same issues for years to come.”

In October last year, the Telecommunications Industry Ombudsman (TIO) said complaints from consumers and small businesses about phone and Internet providers rose 54 per cent in 2008-2009 over the previous 12 months.

In the TIO’s annual report, the Ombudsman, Deirdre O’Donnell, called for the industry to pick up its game as the level of complaints around customer service were still "unacceptably high".

In the 2008-09 period the TIO responded to 230,065 complaints, but 90 per cent were referred back to the service providers. The highest increase was in mobile phone customers with a 79 per cent rise, the TIO said in a statement. This was followed by Internet (57 per cent) and landline (40 per cent) users. Billing and payments, however, remained the biggest concern.

Chapman said as part of the new ACMA inquiry he will speak personally with telco chief executive officers to gain their support and agreement on “enforceable strategies for lowering the number of complaints to the industry ombudsman about complaint handing”.

"The inquiry, which is consistent with the ACMA's evidence-informed approach, will also identify what should be the key elements of good customer relationship management and attempt to plot the pressure points in the interaction between customers and providers. In particular, I want the inquiry to shine a strong light on complaints handling and the unresponsiveness of the industry to its customers," he said.

"We want to establish, as a reference point, an analytic framework and metrics so that this vexed issue of responsiveness and complaint management can be settled for a foreseeable future.

"This framework will be a reference point which community safeguards in future code development can be linked to and measured against.

"The inquiry will also consider how the current regulations can be used more effectively to address industry practices in dealing with its customers."

The ACMA will investigate whether more direct regulation of complaint handling is necessary and if standards should be established.

"A vital part of this inquiry will be determining how consumer expectations can be satisfied in the more ubiquitous (NBN-delivered) broadband, multiple-services world."

The watchdog chief also had a crack at the patch work approach to regulating the industry.

“As regulators, we need to turn the mirror on our structures and roles. I do not believe the current regulatory ‘alphabet soup’ of ACMAs, TIOs, ACCCs, DBCDEs, CAs and TISSCs (along with the state Offices of Fair Trading) is leading to the best solution for some of the bigger problems,” he said. “In the short-term, I will be seeking to work with my colleagues at the ACCC and the Department of Broadband, Communications and the Digital Economy and with consumer groups, led by the Australian Communications Consumer Action Network, to identify emerging issues in telecommunications and develop appropriate regulatory responses. This is best done in collaboration.”

Earlier this month, the Telecommunications Industry Ombudsman (TIO) increased the cost limit at which it can be involved in and make recommendations for disputes involving consumers' telephone and Internet services.

From 1 May and for the first time since its inception in 1993, the TIO will be able to make legally binding decisions on disputes involving up to $30,000 - up from $10,000 previously - and make recommendations on disputes involving up to $85,000, up from $50,000. The new limits will remain in place for the next year.

While the new limits allow the ombudsman to provide recommendations and determine the outcome of costlier disputes, it does not restrict it from investigating disputes outside of these cost limits.

Read the full text of Chapman's speech on the ACMA website.

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Tags TelecommunicationsTelecommunications Industry Ombudsman (TIO)Australian Communications and Media Authority (ACMA)

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