DENHAM SADLER
July 9, 2018

Govt plans to cut TIO’s role

Telco

Govt plans to cut TIO’s role

Judi Jones: Facing a possible reduction in the TIO's remit

The federal government’s plans to potentially scrap the telecommunications ombudsman and significantly change the complaints process have been slammed by consumer groups and the Opposition.

The government late last week released a consultation paper on the planned changes, including plans to reduce the remit of the Telecommunications Industry Ombudsman, the launch of a new, independent complaints review body and the transfer of complaints data to the Australian Communications and Media Authority (ACMA).

A number of consumers group have said they have “strong concerns” with the planned changes that would mark a “backward step” for dealing with telco complaints, while Labor has said the government should focus on the source of the complaints rather than the complaints process itself.

Earlier this year the federal government released terms of references for its review into consumer safeguards in the telco sector, following skyrocketing complaints to TIO. In 2016-17, TIO received more than 158,000 complaints, a 41 percent increase year-on-year.

Late last week Communications Minister Mitch Fifield unveiled a new consultation paper on proposed changes to “ensure that consumers can access an effective complaints handling and redress scheme”.

Under the current complaints scheme, customers can take a complaint to the TIO if they’ve been unable to resolve it with the retailer, regardless of what the issue is. The TIO then goes back to the retailer in an attempt to resolve the issue, before taking further action.

The TIO is industry-owned and industry-funded with an independent chair, led by ombudsman Judi Jones.

But the government said this current process isn’t working and needs a complete overhaul. The consultation paper outlines the introduction of a new External Dispute Resolution entirely independent from industry, which would handle “complex complaints” that consumers have been unable to resolve with the telco.

“This body should have the power to compel providers to take remedial actions, which could include financial compensation and/or the ability to issue fines,” the government said.

The new body would only accept complaints that have been proven to be unable to be dealt with by the service provider’s own internal complaints handling policy.

“Australians are being let down by a system which isn’t working. Consumers are fed up with poor service and inadequate safeguards when their telco fails to address a complaint.

"Complaints about customer service and billing continue to be the top issues reported to the TIO, and complaints in Australia are far too high,” Mr Fifield said.

In a statement, the TIO raised questions over whether the changes are necessary.

“We believe the assertions and ideas set out in the paper need to be tested.

"In particular, we will be testing the propositions that consumers, especially vulnerable consumers, will have the capacity to work with providers in the model being proposed and that a new body is needed to achieve greater independence in dispute resolution,” a TIO spokesperson said.

“It is vital that any change to the complaint handling mechanisms ensures that residential consumers and small businesses continue to have access to a fair, independent and effective complaint resolution service.”

A number of consumer groups have also raised concerns with the proposed changes, saying it will add another obstacle to the complaints process.

“One of the vital elements in the consumer protection regime is the TIO scheme.

"It is fundamentally important to have a robust, well-resourced, independent way for consumers to resolve complaints, to help them sort out the many problems they experience with telecommunications providers,” Australian Communications Consumer Action Network CEO Teresa Corbin said.

“The TIO has been delivering well for consumers, so it would be a backward step if the government’s review resulted in changes that diminished its role and made complaints more difficult to resolve from a consumer perspective.”

The TIO is working effectively as an industry-based body, Consumer Action Law Centre Gerard Brody said.

“The TIO satisfies the benchmarks for industry-based dispute resolution schemes, and has the support of the consumer movement.

"These benchmarks have served consumers well and industry-based External Dispute Resolution schemes have been perhaps the best step forward in consumer protection in the last 30 years,” Mr Brody said.

"With complaints about NBN services skyrocketing, the telecommunications industry experience upheaval, it’s an inopportune moment to conduct drastic restructuring of the complaints process," Ms Corbin said

“Telecommunications is a complex area that every consumer needs to engage with, none more so than at the moment when the whole community is switching over to NBN-based services.

"The last thing consumers need is for avenues of independent redress to be reduced,” she said.

“Telco complaints are very high because the regulatory regime has been a light touch for too long.

"The focus needs to be on service providers’ internal complaint handling, effective customer service guarantees and a stronger more enforceable Telecommunications Consumer Protection Code, rather than reducing consumer rights to redress.”

But in its consultation paper, the government said the current complaints arrangement is time-consuming and ineffective.

“By the time a consumer escalates a complaint to the TIO, they have already spent some time trying to resolve the matter directly with their provider and may experience further frustration with the time taken to reach an outcome through the TIO’s complaint handling process,” the paper said.

“This consumer experience is further compounded as, after the complaint is accepted by the TIO, the TIO typically asks the customer and their service provider to have a further final attempt to resolve the complaint before any conciliation, investigation or other formal dispute resolution action by the TIO can commence.”

The government repeatedly questioned the TIO’s independence in the consultation paper, but Communications Alliance CEO John Stanton rebutted these claims.

“The TIO is fiercely independent, with a strong independent chair, independent directors and even numbers of directors with consumer and industry experience - it is funded by industry fees but not controlled by industry.

"Whether the cost and disruption inherent in dismantling the TIO and replacing it with a new body can be justified to achieve change that can happen in any event needs to be critically considered,” Mr Stanton said.

The government is also planning to pass the responsibility for complaint data handling and reporting from the TIO to ACMA.

But Mr Stanton said that the TIO is already required to report its data to ACMA, which already publishes the data.

The Opposition also criticised the government’s proposed changes, with acting shadow communications minister Stephen Jones saying it has the “wrong priorities and continues to play catch-up”.

“While the government is focused on who handles complaints and how they are reported, the real priority is to fix the root causes of problems: second-rate technology, lack of transparency, and the lack of proper service standards for rectifying faults and minimising downtime,” Mr Jones said.

“The government’s track record on consumer safeguards review is nothing short of a shambles.

"Despite having two full years to dwell on the issue, the Turnbull government has failed to explain how the proposed measures will make a practical difference,” he said.

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