ACMA bans use of ‘Cap’ – Australians to save $1.5 Billion annually

A recent public inquiry which was run by the ACMA found that the overall annual cost incurred by people who choose the wrong mobile plan which doesnt suit their needs amounts to over $1.5 billion AUD. Unfortunately the costs are not limited to the consumers. The complaints process amounts to around 108 million dollars and telcos suffer around 113 million dollars a year writing off bad debts incurred by customers who can not afford to pay the bill.

As a result the Telecommunications Consumer Protection Code (TCP) was announced earlier today, and will act as a firm set of guidelines for all Australian telcos. These guidelines will advise major telecomunication gucompanies on how to conduct themselves around customers in order to avoid “Bill Shock”.

Teresa Corbin, CEO of the Australian Communications consumer Actions Network spoke positivily of the new guidelines:

The code will apply to every service provider in Australia. Compliance with the code is no longer an option. [We] are hopeful that its adoption will result in clearer advertising, easier comparison of products, better information about contracts and better tools to help consumers avoid bill shock.

The new codes, which will be enforced starting on the 1st of September 2012, include several bill shock prevention measures. Customers will receive warning messages at different stages of their monthly usage. Users will be texted by their telecommunications provider once they have reached 50, 85 and 100% of their monthly calls, texts and data allowances. Unfortunately telcos have been able to somewhat weasel their way out of fully complying with the new guidelines. Telcos will not have to provide users with their data allowances in real time. A delay of up to 48 hours may exist because some telcos claim that their billing system is incapable of providing customers with that information in real time.

You may be wondering how these guidelines will prevent misleading information and advertising? Well one of the favourite terms used by all major telcos in Australia will be banned and no longer a weapon in their arsenal. The word Cap will no longer be found when entering your local Telstra store unless the plan that is offered has a definitive limit which can not physically be exceeded. This means that if you are signed up to a cap as of the 1st of September you have peace of mind, knowing that once you have reached your cap your phone will no longer be operational for making calls, texts and data usage until the next billing cycle begins.

Other terms will also be closely monitored by the ACMA to prevent misleading information. Another requirement that will be placed on telcos is to provide all customers with a “Critical Information Summary”. This will include detailed information about the pricing and minimum spend across all of the products offered. These summaries will be standardized in order to simplify the comparison process.

Android Australia is thrilled to see an authority taking action to tear down the walls which prevent consumers from making the most informed decision possible. These new policies should make comparisons between Telcos a simple process which should heavily increase competition in the industry. That means cheaper phones and better deals for our loyal readers as well as all Australians.

Unfortunately it’s worth noting that the ACMA, unlike the ACCC, has very limited disciplinary powers. It can issue directions, but cannot fine or penalize wrongdoers. That being said the ACMA has made it clear that it can and will take legal action against a Telecommunications provider if they choose to blatantly disregard the new policies.

Source: The Age Technology