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Telecommunications Consumer Protections Code

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Telecommunications Consumer Protections Code

Telecommunications Consumer Protections Code

    Online Billing Research Report

    A consumer research report by the

    Consumers’ Telecommunications Network

    April 2009

    Unit 2, 524-532 Parramatta Rd, Petersham, NSW 2049 Australia

    Tel: (02) 9572 6007 Fax: (02) 9572 6014 TTY: (02) 9572 6047

    Website: www.ctn.org.au Email: ctn@ctn.org.au

     Incorporated in NSW ABN 24 377 532 644

Executive Summary

    In light of the upcoming review of the Telecommunications Consumer Protections (TCP) Code, CTN has investigated the effectiveness of the consumer protections within the code with consideration to the transition from paper bills to online billing. Research was conducted to investigate code compliance by service providers and ascertain current end-user experience. Whilst touting the convenience and environmental benefits, CTN has found that the shift to online billing does not take into account the needs of all consumers. Basic consumer rights as outlined under the TCP code are being overlooked in favour of cost savings by service providers. Firstly, gross assumptions are being made that all consumers have the capacity to afford the technology required to utilise online billing. This is compounded by the fact that in most cases consumers who must opt to receive a paper bill are then hit with a fee and additional costs associated with payment methods.

    In its investigation, CTN also found that a certain level of digital and financial literacy is necessary in order to access and manage bills in an online form. Bills or notifications are received via email and then require a consumer to log in to a website and make payment. Should any further information be required about terms and conditions, consumers must then search through a website and discern where to find the necessary information, whether it be in their „my account‟, in the „frequently asked questions‟, available from a link in small print at the bottom of a page, amongst legalese or by using an accurate search engine, if one is provided for the site. Another issue overlooked by the changes to billing practices is accessible features for consumers with vision impairment or blindness. This lack of consideration prevents people from reading their own bills and from using a provider‟s website to

    seek out information or clarification.

    Furthermore CTN is concerned about misleading claims about benefits for the environment. The green wash that is being proliferated as the rationale for this

    sudden shift by service providers and the ensuing charging for paper bills needs to be addressed. Service providers should not profit from ceasing to provide online bills, instead the saving should be passed onto the consumer or the green claim held accountable through donations and commitment to carbon reduction schemes. In 2007/08, complaints to the TIO increased by 46 per cent to 149,742 complaints, 1compared to a 17 per cent increase in 2006/07. In the last three months of 2008

    complaint issues mobile phone Billing and Payments were the most frequent source 2of concern, followed by landline Billing and Payments complaint issues. This

    evidence supports the need for close attention to this issue in future consumer protections. To empower consumers in their use of online billing and to avoid ending up in a situation that escalates to complaints; CTN has produced a Tip Sheet to 3assist consumers in understanding their rights under the TCP Code.

     1 Telecommunications Industry Ombudsman, 2009, „Investigations Update‟ TIO Talks 42, Melbourne.

    http://www.tio.com.au/publications/TIO_talk_issues/42/42.6.html (accessed 3/4/09) 2 Telecommunications Industry Ombudsman, 2009, „Analysis of Issues‟ TIO Connect Resolve Campaign,

    http://www.tio.com.au/Members/MemberPublications/MNews/connect-resolve.htm (accessed 3/4/09)

     3 See Appendix One

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    Results of this CTN study highlight, that whilst service providers are generally complying with the billing clauses of TCP Code, consumers are still experiencing disadvantage, disempowerment and discrimination under the code in its current form. As it stands it is not acceptable for consumers to be offered online billing as the sole method of receiving a bill without being charged a fee. It must be the case that principles of accessibility, affordability and equality of access underlie the code requirements even when applied to online billing, and that the recommendations from this report be incorporated into future revision of the TCP code.

    Policy Recommendations

    1. It should be mandatory through legislation that paper billing be free of charge to

    ensure issues of affordability and accessibility are addressed. 2. DBCDE conduct research into the security of on-line billing practices to ensure

    appropriate safeguards are identified and then put in place to protect

    consumers from identity fraud in particular.

    3. ACMA consider undertaking a comprehensive audit of billing practices and

    compliance with the TCP Code.

    4. ACCC research the impact on consumers generally as they migrate to new

    forms of billing in the digital economy and then frame their compliance and

    other activities to assist consumers

    5. Green claims by service providers should be monitored to ensure that the

    reduction in carbon emissions and savings made by switching to an online bill

    are passed onto either the consumer or to an appropriate carbon off-setting

    organisation.

    6. If a consumer encounters financial hardship as a result of a change to the billing

    terms and conditions during a contract, they should have a right to opt put of

    their contract without incurring a penalty fee as this change can cause

    significant detriment to the consumer.

    7. The Privacy Commissioner should investigate the impact of the migration to on-

    line billing on consumers being referred to credit reporting agencies and ensure

    that any instances of non-payment of bills are not due to a lack of proper

    consumer protection.

    8. The TIO should include online billing as an individual category in their complaint

    collation to monitor consumer experiences. This data may provide evidence to

    inform the Communications Alliance Telecommunications Consumer Protection

    (TCP) Code Review in 2010.

    9. Service Providers should make bills available in rich text format (rtf) to enable

    text, font and size to be altered as required using assistive technology. 10. Service providers must ensure that their websites adhere to WWW Content 3.0

    (W3C) accessibility standards and guidelines.

    11. Service Providers should ensure that there are no advertising pop-ups that

    distract consumers when opening their on-line bill and account details.

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    12. Standards Australia should consider developing an on-line billing standard so

    there is more uniformity with practices and consumers can become familiar with

    acceptable benchmarks. It would be very beneficial if this standard also covered

    online billing meters as these are also confusing and at times unusable. 13. Service Providers should be encouraged to take up the practice of donating any

    charges for paper bills to a carbon reduction initiative.

    14. Communications Alliance should consider opportunities to provide training to

    assist service providers so that the migration to on-line billing occurs

    seamlessly.

    15. ACCAN consider this report and continue to raise awareness about online

    billing issues with appropriate bodies.

Background of Telecommunications Consumer

    Protections Code

    4Under Section 112 of the Telecommunications Act 1997, the Australian Parliament

    expressed the intention for the telecommunications industry to devise industry codes relating to telecommunications matters. To ensure this, the Telecommunications Consumer Protections Code (TCP) took effect in 2007 to provide protection of small business and residential consumers.

    The formation of the TCP was an extensive process of which CTN began campaigning as early as 1999. There was an understanding the strong need for consumers to be able to access a single code about their protections, and so lobbying continued in 2000 and 2001. By 2004, the Communications Alliance had made a single consumer code a priority as part of their Strategic Plan. 2005 saw the Communications Alliance Consumer Issues Reference Panel (CIRP) formulate a subcommittee to comprehend the issues involved in creating a single consumer code. Communications Alliance also engaged Ovum consultants to undertake a cost benefit analysis for a single consumer code for the industry. CTN played a key role in the process of the new single consumer Code and in 2006 we were part of the Communications Alliance Steering Committee which considered drafts of the code and guideline.

    The new Code expanded on regulation outlined in the Telecommunications 5(Consumer Protection and Service Standards) Act 1999. For instance, the Act

    specifies that carriers and carriage service providers are required to comply with the TIO (Telecommunications Industry Ombudsman) scheme, whereby unsolved complaints between customers and carriage services are addressed. The new Code empowers the TIO to deal with complaints about matters which fall under the Telecommunications Consumer Protections Code.

    Prior to the TCP, six separate consumer codes addressed the areas of consumer information including: prices, billing, terms and conditions, customer transfers, complaint handling and contracts. Under the current Code section six deals

     4 See Appendix Two 5 Attorney General‟s Department, Telecommunications (Consumer Protection and Service Standards) Act 1999, Canberra, 2009.

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specifically with Billing and outlines the requirements of service providers in their 6billing practices.

    The TCP Code will be reviewed by Communications Alliance in 2010 and the

    recommendations from this report will inform consumer representations during the review process.

    Methodology

    Over the course of five weeks, various qualitative and quantitative research methods were utilised to conduct an analysis of the effectiveness of the Telecommunications Consumer Protections (TCP) Code in relation to billing practices.

    The data for the quantitative analysis was gathered by approaching consumers to submit their bills for examination. In doing so, participants were contacted formally via a written request, outlining the purposes of the research. Participants were then required to sign a release form that stated an understanding of all measures taken to ensure the privacy and protection of 7personal identifying details.The samples collected represented paper and online bills of

    Australia‟s five major telephone service providers. Individual clauses from the code were identified as applying to the online billing scenario and were used to form a checklist of 8compliance. Data from the Telecommunications Industry Ombudsman (TIO) revealed further clauses that warranted investigation due to the number of complaints registered against them 9during the final quarter of 2008.

    Each bill was surveyed using this checklist to ascertain whether the practices of the billing service provider complied with the relevant clause in the code. This analysis went one step further to identify any issues, which whilst passing the compliance test, still caused issues of concern for consumers.

    Qualitative Interviews were conducted to clarify issues which emerged in the initial analysis of the bills. Policy ramifications and future recommendations were discussed in the context of interaction between the Telecommunications Act 1997 and the TCP Code. Interviews were

    also conducted to explore the issue of accessibility for people with disabilities and to get a greater understanding of the common complaints received by the ombudsman in this area. Primary research included a case study which exemplified the financial impact of charging for paper bills and the affordability constraints linked to accessing billing and services online. TIO complaints data was used to comprehend the increase of billing complaints over the last Quarter.

    Moreover, as part of secondary research, the Telecommunications (Consumer Protection and

    Service Standards) Act 1999 and the six previous telecommunications codes were viewed to

    gain a detailed background of the TCP Code. Data and trends from the Australian Bureau of 10Statistics provided insight as to Internet usage in Australian homes and its relation to the issue of customers not being able to access a computer or the Internet to view their bill. Finally, the legal and regulatory documentation from the websites of service providers were scrutinised to uncover the billing practices and policies of each service. The aim of the research was however to audit compliance with the billing code and not audit billing practises. For this and other reasons, CTN believes this was not necessary to achieve the objective of

     6 See Appendix Three 7 See Appendix Four 8 See Appendix Five

    9 Telecommunications Industry Ombudsman, Code Issues All Members December 2008, Melbourne, 2009. 10 Australian Bureau of Statistics, Internet Activity, Australia: June 2008, Canberra, 2009.

     Australian Bureau of Statistics, Population Clock, Canberra, 2009.

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    the project. It has been ensured throughout this report that particular service providers are not identifiable

    Summary of Findings

    Code Compliance

    A crucial aim of the research project was to investigate whether there are any shortcomings in the current TCP Code. This research entailed the development of a survey tool to draw comparisons of the online bills of five Australian service providers to significant clauses of the billing section of the TCP Code. The findings are as follows:

    Clause 6.2.5 (a) A Supplier must inform a Customer of relevant Bill Media available to the 11 Customer including associated terms and conditions.

    It was found that three of the five service providers complied with this component of the TCP Code. Of those that did comply, the information was not always easily found. One service provider‟s website was set out well to show various billing options with demonstrations but no terms and conditions were specifically in this section. To locate terms, the consumer would have to navigate to the bottom of the website‟s main page.

    A letter received by participating consumers from their service provider, informing them of the switch to online billing had very few terms and conditions and they appeared in small print at the bottom of the letter. There was no customer service number on the letter to find out further terms and conditions. On referring to the website, there was no direct link to information on billing options on the main page. In order to find these details a consumer would need to navigate to the frequently asked questions link, or use the correct search terms to pull up relevant documents.

    Another service provider did not have any information about paper bills as an option in their terms and conditions. However, after some navigation around the website, research revealed that paper bills can be provided without charge in “special circumstances”. This situation

    whereby the consumer is „informed‟ of the relevant bill media available to them in implicit terms is once again exemplified by service providers on their websites. Particularly the menus under which this information is displayed are not clear and are indirect. As an example, on one website, under the billing and customer care section, there is no direct option given for receiving a paper bill. Instead under the frequently asked questions under the account charges on my bill there is an explanation.

    Clause 6.2.6 A Supplier must advise Customers who choose to view or receive an Electronic Bill that its presentation may be adversely affected by equipment or conditions beyond the Supplier's control.

    The study revealed that only two of the five telephone service providers investigated had complied with this clause of the code. Of the two compliant providers, the advice was not clearly written or easily located. Both notices were found deep within the terms and conditions on the respective websites. Interestingly, the remaining three service providers that did not advise consumers that the presentation of online bills is beyond their control also did not have any terms and conditions about the matter. This rule could be improved by an overarching requirement that the supplier provides other methods for the customer to receive their bill.

     11 Communications Alliance, C628: Telecommunications Consumer Protections Code 2007, Sydney, 2009.

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Clause 6.2.7 A Supplier must present and format Bills so that Customers can easily read and 12understand them.

    None of the service providers adequately complied with this clause of the TCP Code. The issue concerned accessibility features for consumers with vision impairment. The online bill format used across all providers was that of a pdf, a format which is not compatible with screen reader technology (appendix CTN Accessibility Tip Sheet). There were also issues with the graphics in the background of the bills which made reading the bills with assistive technology particularly problematic. This issue of accessibility extends to the online aspect of billing i.e. accessing the bill through a website and any reference that needs to be made to information on a website. Service provider websites do not all meet accessibility requirements thus rendering it impossible for all consumers access the information pertaining to understanding their bills.

    Clause 6.3.2 (k) On each Bill it issues, a Supplier must include at least a contact point for Customers to make Billing Enquiries. The contact point must include a telephone number if the Bill is for a telephone service. For other services, if an email contact point is listed on the 13bill, a telephone number or mailing address for Billing Enquiries must also be listed.

    Findings show the 5 service providers either had a contact number displayed on the top of the first or second page. No email addresses were provided, however all bills included the service providers‟ website addresses. Best practice for accessibility was only followed by one of the five service providers who displayed the option for consumers who are Deaf or hearing/speech impaired to pay their bill using a TTY (reference the definition of a TTY) Clause 6.4.4 A Supplier must ensure that a Customer has access to Itemised details of all 14Charges relating to a Standard Telephone Service in accordance with clause 6.4.5 or 6.4.6.

    Generally, itemised details of all charges were available on the bill itself. In the instance of one service provider, all itemised charges are present on the bill however the “95 calls” that

    were discounted as they were “Per Second Saver” calls were not itemised together. Therefore,

    a customer would have to individually look for 95 calls that were in this saving category. This is very confusing for consumers.

    Clause 6.6.1 For a Standard Telephone Service, payment by mail must be one of the 15payment options, unless the Customer agrees otherwise.

    All of the service providers gave the option of payment by mail. Moreover, 4 of the 5 service providers displayed payment options clearly on the second page of their bill, including a mailing address. It is however important to note that the payment by mail option requires a money order or a cheque, incurring postage charges for the consumer that would be avoided if online payment was made.

    Clause 6.7.2 A Supplier must ensure that Itemised Charge details relating to the current Bill are available without Charge, except:

    (a) for a charge to recover high unit costs involved in a particular type of Itemisation; or (b) if a Customer's request for information on Itemised Charge details is frivolous or vexatious, 16in which case the Charge must comply with clause 6.7.1(a) and (b).

     12 Communications Alliance, C628: Telecommunications Consumer Protections Code 2007, Sydney, 2009. 13 Ibid 14 Ibid 15 Communications Alliance, C628: Telecommunications Consumer Protections Code 2007, Sydney, 2009. 16 Ibid

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    Results of this clause show that all of the service providers investigated, have, on a technical level, complied with this component of the TCP Code. However, the level of compliance with the Code was found to be inadequate due to the troublesome nature of accessing such information and the issue of whether details attained are truly without a charge.

    Another pressing concern was that itemised charge details were available without charge but only in one format: online. Due to the Australia‟s major service providers switching to online billing as their default method, this has become the free bill media, whereas paper bills now incur a charge. Also, call records available online are not without charge as a customer must own a computer and have access to the Internet. Therefore requiring itemised charge details to be accessed at a cost to the consumer.

    Digital literacy

    Digital literacy refers to the ability of a person to sufficiently comprehend and navigate through the digital medium of communication namely, the Internet. On a fundamental level, customers are required to be digitally literate in order to access and comprehend their online bills. Currently, service providers are opting to migrating online billing as the general form of bill media available to customers. This switch to e-billing creates a situation where vulnerable consumers do not necessarily have the skills required to obtain information about their bill because they simply cannot access their bill online or navigate thoroughly through the telephone service provider‟s website to locate required information about their bill and online account.

    It is concerning that details pertaining to consumer protection under the TCP code, are too often placed on the service providers‟ websites under obscure headings or in areas that are

    not easily located from the home page and require significant searching to uncover. Of further concern are instances whereby when a consumer does have the opportunity to opt out of online billing and receive a paper bill that they must go online to make this request. The use of terms such as account toolbox to describe an area on a website from which you

    can change your account details does not make it clear for consumers. Instead a simple process is made more difficult to decipher by the use of such terms.

    Affordability

    During the course of the research, CTN found that the introduction of online billing as the standard billing format, creates financial concerns. To investigate this, a case study was undertaken, involving a single mother who is faced with financial hardship as a result of the introduction of a fee for paper bills.

    Case Study:

    “Ms A approaches a service provider to purchase a mobile phone. Ms A tells the sales person that she is a single mother on a low income who cannot afford a home phone or internet, but needs a mobile phone. Ms A then explains to the sales person that she cannot afford to own a computer, therefore needs to be able to receive her bills in paper format and be able to pay in person. Ms A is assured by the sales person that she can receive a paper bill and go to any store and pay her bill over the counter. Happy with the billing options, Ms A signs a twenty four month contract, only to receive a letter eight months later informing her that from 1 May receiving a paper bill will incur a charge of $2.20. Ms A is distressed as she cannot afford additional costs on her already stretched income, supporting a child as a single parent. Further to her frustration, there is not number displayed on the bill to ring and make a complaint. Ms A thinks it is unfair that her service provider can make her pay when

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    she went out of her way to ensure that she could receive free paper billing with her mobile plan.”

    Further, the letter received by Mrs A had no customer service number on the page, leaving no method for the customer to contact the service provider and dispute the matter. The letter was sent with only 1.5 months notice of the new paper bill charge to be incurred. In addition, the service provider mentions, in a small font at the bottom of the letter, that online bills will be “phased in over time”, suggesting a replacement of paper billing altogether.

    On closer examination, it becomes apparent that further costs are incurred by consumers who nominate to receive a paper bill and choose to make a payment by paying in person- not online or over the phone. The option to pay by mail allows for a cheque or money order to be sent in the post or for payment to be made at any Australia post store. It appears that the cost to pay at Australia post differs between providers, from no applicable charge, to 50 cents or $1.50, to the cost being calculated into the cumulative charge for each paper bill. Alternatively a money order or bank cheque also occur separate additional costs. When the cost for the paper bill and the method of payment by traditional means are put together multiplied by the frequency of bills and number of service providers it can be seen that consumers are penalised substantially by not choosing online billing. In cases, as exemplified earlier where online billing is not an option due to already pressing financial hardship it is unacceptable that vulnerable consumers are exposed to such fees and charges.

    Affordability is an additional concern faced by people with a disability who are required to view their bills online or incur a charge. An interview with Dr. Scott Hollier, an expert in web accessibility, at Media Access Australia showed that consumers with vision impairment require specialised equipment, such as text-to-speech programs and screen magnification programs, to view general information on their computer and online. The cost of such programs is between $1000 and $2000, a financial burden which is shouldered by the individual, if they can afford to do so.

    Accessibility

    According to clause 3.3.3 of the Telecommunications Consumer Protections Code, “A

    supplier must ensure that its Customers can view and download all relevant terms and conditions of its telecommunications services from a website and that the website is 17accessible. An interview with Dr.Scott Hollier of Media Access Australia has revealed that all major telephone service providers are currently not adhering to this section of the code, in relation to customers with vision impairments. Further issues that emerge from the research include unreadable online billing formats, privacy concerns and telephone service provider information not being easily accessible online.

    To begin, Dr. Hollier expressed a concern about the software used by the majority of telephone service providers to present their online bills. Bills are provided in pdf. documents and are described by Dr. Hollier as “a fairly inaccessible format” as bills arrive in a locked file;

    disenabling colours, fonts and size to be altered. Such components of the bill are crucial and require adjustment in order for vision impaired Australians to clearly understand their online bills. For instance, Dr Hollier used the example of a telephone service provider whose background image interrupted the viewing of the online bill. The ability for a vision impaired customer to view a bill is aided significantly by a screen magnification program. However, once the program is turned on and the font of the bill is automatically changed, it clashes with the background graphic, causing the text in the bill to be unreadable.

    Moreover, an unreadable format has meant that many Australians with vision impairments have had to rely on family or friends to read their bills out loud. This instance causes problems if the vision impaired consumer has a non-disclosure occupation or simply has

     17 Communications Alliance, C628: Telecommunications Consumer Protections Code 2007, Sydney, 2009.

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    sensitive information in their bill that they would not wish to share. Here, the issue of a lack of privacy and disempowerment felt by people with vision impairment is a serious matter which telephone service providers must acknowledge and make a genuine attempt to resolve. Finally, telephone service providers must make their websites more accessible as many telephone service providers are opting to make the online arena their primary point of contact with customers, for instance with email addresses provided for contact with customer service and customers being referred to company websites for information,. Dr Hollier argues that online information from telephone service provider websites need to be clear and easily found for all customers regardless of ability. Specifically, pop-up advertisements on websites prohibit clear viewing for Australians with vision impairments. Such distractions must be removed to allow customers to sufficiently understand the billing charge, terms and conditions and the standard method of opting out of a service if necessary.

    Financial literacy

    The idea perpetuated by service providers promoting online billing as a more convenient and comprehensive method for keeping track of bills is far from the reality experienced by all consumers. The added difficulty of having to log on to an account, remember passwords, keep passwords secure, keep track of email notifications, store past online bills and ensure finances are budgeted in line with direct debits disadvantages consumers. The following case study highlights a situation where a move to online billing has resulted in detriment due to a lack of understanding stemming from poor financial literacy in a digital environment: Case Study:

    Ms B was shopping for a new pre paid handset when a sales person suggested she try a plan and promoted the benefits and savings that would result. Ms B figured that as she was spending $50 a month anyway, she may as well upgrade to the plan as that way she would receive a new phone. When asked if she would like paperless billing, Ms B agreed as she was an environmentally conscious consumer and

    recognised the savings in paper would reduce carbon emissions. In order to receive the online billing, Ms B filled out paperwork and gave her email address. Ms B began to use her phone, but did not receive a statement as her email address had been entered incorrectly. Ms B fixed the error with the service provider and was advised of how to go online and monitor her bill. On doing so, Ms B discovered her bill is $250 over her cap; the next bill arrives two weeks later and was also over $250. Ms B contacted the service provider and requested an extension to pay and was given one month. However, in the meanwhile Ms B’s phone had call barring enacted. The next bill

    was under the cap as Ms B had now learnt how to check the running total online and monitor her usage. This was not possible for the first two bills, however as Ms B had not been aware of the options available.

    In the above situation Ms B, had the financial literacy skills necessary to contact the service provider, trouble shoot the error, negotiate payment options and use the details provided to her to access the online features for her account and monitor her billing to avoid another unexpected high bill. It can be seen however, that should a consumer not have the financial acumen shown by Ms B, they would find themselves in considerably more debt than an already unaffordable $500 and without the payment arrangements to enable them to keep from falling into debt recovery processes.

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