New Rules To Prevent Bill Shock
Summary: Australian mobile phone users will find it much easier to compare mobile phone plans following the Australian Communications and Media Authority (ACMA) announcement of the Telecommunications Consumer...
Australian mobile phone users will find it much easier to compare mobile phone plans following the Australian Communications and Media Authority (ACMA) announcement of the Telecommunications Consumer Protection (TCP) code.
The TCP code is a result of many months of discussions between the ACMA, the telecommunications industry, and consumer groups, with the goal being the simplification and standardisation of Australian telecommunications offerings. A number of key changes have been agreed upon, including:
This is something that we at WhistleOut have been pushing for some time now, although it has not yet gone as far as we'd like to see. As part of the new rules telcos must include unit pricing information in their advertising, allowing users to clearly see the cost for calling standard Australian numbers, a standard text message, or 1 megabyte of data. It's similar to how supermarkets now display a cost-per-kg or cost-per-unit for their groceries. Over recent years Australia has fallen out of line with most countries, who already display phone plans in terms of the number of included call minutes, rather than included call value. It's much simpler to understand that you have 500 minutes, rather than "$500 credit". Hopefully this is the first step in moving towards a minutes based system!
Critical Information Summary
Along with the requirement to show unit pricing, telcos must also now provide a "Critical Information Summary". This is basically a standardised summary of unit pricing, contract duration, and a calculation on the number of 2-minute phone calls that could be made on a plan. This will enable the user to clearly compare the actual value of a mobile phone plan, without having to manually evaluate call rates, flagfalls, and so on. It's another step in the right direction towards a total minutes system.
Common sense has prevailed with the decision to force telcos to notify customers when they have used 50%, 85%, and 100% mobile phone and data usage. This is perhaps the most critical of the changes in terms of bill shock prevention, particularly as it directly addresses the most common form of bill shock - excess data charges. Although many of the telcos already have usage notifications in place, they often only cover call credit usage, whilst ignoring data usage. We hear many stories of customers who thought they had usage alerts set up, only to be whacked with an excess data usage bill. Under the new rules the customer will be notified when they are approaching their data limit and can therefore make a more informed decision about whether to continue using data.
Usage alerts must be delivered within 48 hours of a user reaching the 50%, 85%, or 100% level. We'd like to see this go one step further and allow users to access real-time data usage information, however the telco industry campaigned strongly to include the 48 hour delay, primarily due to the difference in technical capabilities between telco companies. An ACMA spokeswoman said the concession was an acknowledgement of "dealing with a diverse industry from Telstra down to a garage-operated ISP".
Confusing Advertising Banned
Another long term gripe of many mobile phone users is the use of words such as "cap" in telco advertising. The word cap indicates that your spend will not exceed the set amount, however we've all experienced cases where we've received bills in excess of the monthly "cap" amount. This is because in the land of telcos the word cap actually refers to the monthly minimum spend, rather than a maximum. The ACMA has recognised the misleading nature of such terms and has now banned their use. Other potentially misleading terms such as "unlimited" will also come under scrutiny.
Improved Billing Information
Providers must now include information on bills about how to access usage information, along with providing a minimum of two years billing history. This enables the user to gauge their actual usage levels and modify usage where necessary.
There has been a significant increase in the number of complaints being made to the Telecommunications Industry Ombudsman about customer service and complaint handling issues. Over the 10 years to 2010 complaints to the TIO increased 295 per cent! From a consumer perspective the most frustrating aspect of lodging a complaint is the need to re-explain your story over and over as you bounce from one staff member to the next, but that should no longer be such a burden with the introduction of compulsory unique reference numbers. This enables a complaint history to be quickly referenced and should drastically cut down the time wasted retelling your story. Complaints must now be resolved within 15 days, and urgent complaints within 2 days.
When do the changes take effect?
The new code will be implemented in four key phases over the next two years:
- September 1st 2012 - code registration & complaints handling rules take effect.
- October 27th 2012 - Unit pricing information to be included in advertising.
- March 1st 2013 - Critical Information Summary to be available for all customers, along with comparative billing information.
- September 1st 2013 - Spend management alerts to be implemented by the major telcos, with smaller operators having until September 2014 to catch up.
Two years to roll out the code does seem a bit excessive, but telecommunications companies claim that the new systems will take time and money to develop.
ACMA chart showing the timeline for implementing changes.
It's great news for consumers! The key wins for your average punter will be the simplification of mobile phone plan pricing due to the implementation of standard unit pricing, and the compulsory implementation of usage alerts to help prevent you receiving a nasty shock in the mail. It's expected that the ACMA will monitor the progress and modify the code if necessary, whilst also keeping an eye on the level of customer service complaints received by the Telecommunications Industry Ombudsman. Here's hoping the major telcos are quick to implement the changes!
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