ACMA public inquiryRelease of draft inquiry report

Briefing

> Purpose of draft report

> Background for Reconnecting the Customer

> Evidence and research collected

> Key findings

> Proposed solutions

> Future challenges

> Briefing pack

> Next steps

Purpose of draft report

> Provide the ACMA’s draft findings regarding:

> Problems – Are there systemic problems with how the Australian telecommunications sector deals with its customers?

> Causes – If there are problems, what are the causes?

> Solutions – What are the potential solutions?

> Future issues – what is best strategy for addressing customer care issues in converging communications environment?

> Invite submissions and comments

Background

> Sustained increase in TIO complaints

> Increasingly industry complexity

> Prepare for NBN era

Evidence and research

> 135 submissions in response to consultation paper and five public hearings in metropolitan and regional areas

> Industry data

> Research about:

> Consumer experience of customer care

> Behavioural economics and consumer decision-making

> Performance metrics

> Best practice external dispute resolution

> 3G users’ experience

Key findings

> Advertising & marketing practices confuse consumers about products, especially when comparing value of different plans

> Many consumers lack sufficient info about products prior to entering contract – contributes to problems such as bill shock

> No transparency for consumers about relative performance of CSPs regarding customer care quality

> Consumer difficulty understanding and monitoring charges contributes to bill shock

> Appropriate consumer safeguards regarding clear and enforceable rules about CSP complaint-handling are lacking

> TIO scheme not meeting best practice in some areas

Approach to solutions

> Two key drivers of complaints:

1. Quality of information provided in pre-sale marketing and advertising, and pre-contract phases of product life-cycle

2. Unexpectedly high bills (‘bill shock’)

> Two key drivers of customer satisfaction:

1. Timely resolution of issues

2. Effective handling of complaints

Proposal 1: Improved advertising practices

> Objective: Improve marketing and advertising practices by introduction of clear and enforceable rules that apply to all providers.

> Proposal to achieve objective:> Prohibit use of terms known to be confusing for consumers

> Require providers to publish either

> an effective unit pricing rate and stated unit pricing rate, or

> volume of calls, text messages or megabytes a consumer would receive inside and outside included value of plan

Proposal 2: Improved product disclosure

> Objective: Provide consumers with clear, accurate and comparable information about the key features of products and aspects of a service before entering into a contract.

> Proposal for achieving objective: Provide consumers with critical information disclosure summary before sale that:

> summarises critical product information (e.g. term of the contract, exit fees, minimum monthly payment)

> is available for different types of product

> Includes non-product specific information (e.g. contact details, how to access complaint processes, consumer tools, etc).

Proposal 3: Performance reporting & customer service charters

> Objective: Introduce transparency about the relative quality of customer care, especially regarding timeliness.

> Proposal for achieving objective:

> Providers with >30,000 res. and small bus. customers publish:

> total contacts made by existing customers

> number of repeat contacts made by the same customer within a 45 day period

> total complaints received

> total number of residential and small business customers.

> Providers encouraged to publish customer service charters.

Proposal 4: Expenditure management tools

> Objective: Equip consumers with the tools to manage their telecommunications expenditure.

> Proposal for achieving objective: Providers required to offer tools that allow customers to monitor accumulation of charges during a billing period, in real time.

> For plans with no hard cap or shaping this should provide:

> equivalent platform-based notification (eg. SMS for phone)

> consumer-nominated expenditure/usage notification point

> notification which includes consequences of limitations and unavoidable exclusions.

Proposal 5: Internal complaints-handling

> Objective: Internal complaints-handling standards that meet ‘best practice’ to be implemented by all service providers.

> Proposal for achieving objective: Providers required to:

> adopt definition of complaint from AS ISO 100002-2006

> comply with principles in AS ISO 100002-2006

> establish minimum standards for:

> timeliness in complaints-handling

> documentation of complaints procedures

> analysis and reporting of complaints data.

Proposal 6: Changes to TIO scheme

> Objective: Ensure TIO meets best practice standards for EDR schemes, and consumer protection standards within the sector are enhanced.

> Proposal for achieving the objective (in context of broader TIO review by DBCDE):

> TIO regulatory framework and/or governance framework amended to create a unitary governance model

> consider legislative change to prohibit providers that are not TIO members from operating within sector

> improve TIO process for dealing with systemic issues.

Future challenges – the ‘next chapter’

> Proposals intended to:

> address current problems

> provide consumer safeguards against future challenges.

> Final report will specifically address future challenges.

> Essential to maintain momentum created by Reconnecting the Customer

Briefing pack documents

> Draft report

> Summary of proposed solutions (table)

> Executive summaries of supporting research

> Fast facts consumer booklet

> Overview and summary of recommendations

Next steps

> Further dialogue with industry and consumers

> Consider submissions

> Consultation period ends on Friday 15 July 2011

> Final report expected late August 2011

> Work program to implement solutions will commence immediately following release of report