ACMA to launch inquiry into telco complaints

The Australian Communications and Media Authority will launch an inquiry into the telecommunications industry’s handling of customer complaints, after new figures show grievances to the Ombudsman have now reached over 900 per day.

A recent report from the Ombudsman revealed complaints grew by 1.8% during the six months to August 2009, with major telcos paying $1 million in compensation during 2008-09.

During 2009, the Ombudsman recorded an increase of 130% in relation to complaints about complaint handling services, and a 118% increase in complaints about customer service.

Many of the complaints are due to longer-than-anticipated waits for new connections or disconnections. Additionally, several of the complaints relate to repairs not being undertaken as promised.

“The poor complaint handling of the industry is legendary,” ACMA chairman Chris Chapman told an industry conferences yesterday, where he announced the inquiry. He said new products and innovation is causing customers to become frustrated.

“What spurred this increase is a matter of conjecture – overly aggressive smartphone plans, an inevitable Wild West mentality when new opportunities spring up, outsourced offshore help desks, and perhaps greater customer scrutiny of their bills as they became more cautious in the economic downturn.”

The inquiry will examine whether more regulation of complaint handling should be implemented, and judge whether more standards should be introduce to guide telcos.

“Many would share the ACMA’s concern about whether the current arrangements which underpin telecommunications consumer protection are really effective in dealing with the issues that concern consumers most,” Chapman said, adding the issue must be solved ahead of the construction of the National Broadband Network.

Chapman also said the inquiry could determine whether ACMA should be given power to issue million dollar infringement penalties faster than current provisions allow.

“As part of the inquiry, I will personally brief CEOs of the larger service providers (representing 90% of the TIO complaints) and ask for their support. As the learnings emerge from the inquiry, I will seek their collective agreement on enforceable strategies for lowering the number of complaints to the industry Ombudsman about complaint handing.”

“Whether this is evidence of a failing regulatory system or just a perception of that failure, I now believe this issue has to be confronted directly and urgently otherwise we will be talking about these same issues for years to come.”

Chapman’s speech came as communications minister Stephen Conroy announced in a separate statement that he will amend the Telecommunications Act to include improvements to consumer protection laws.