TELCOMMUNICATIONS CONSUMER PROTECTIONS CODE (C628:2012) EXPLANATORY STATEMENT

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1 TELCOMMUNICATIONS CONSUMER PROTECTIONS CODE (C628:2012) EXPLANATORY STATEMENT Intrductin This is the Explanatry Statement fr the revised Cmmunicatins Alliance Telecmmunicatins Cnsumer Prtectins (TCP) Industry Cde (C628:2012) (the Cde). This Explanatry Statement utlines the purpse f the Cde and the factrs that have been taken int accunt in its revisin. The Cde is t replace the C628:2007 Telecmmunicatins Cnsumer Prtectins (TCP) Industry Cde published by Cmmunicatins Alliance in September The Telecmmunicatins Act 1997 (Cth) (the Act) encurages self-regulatry prcesses. Cmmunicatins Alliance has been at the frefrnt f these prcesses and has wrked clsely with suppliers, regulatrs, the Telecmmunicatins Industry Ombudsman (TIO) and cnsumer grups t develp industry cdes f practice that prmte the efficiency and grwth f the telecmmunicatins sectr and prvide apprpriate prtectins fr residential and small business cnsumers f telecmmunicatins services in Australia. Backgrund The existing TCP Cde (C628:2007) was develped in 2007, and was the result f a cnslidatin f six individual cdes int ne single cde. It is accmpanied by the Telecmmunicatins Cnsumer Prtectins Industry Guideline (G631:2007), designed t aid in interpreting the Cde rules and t prvide examples f hw a supplier may chse t cmply with the rules f the Cde. Under the prvisins f the existing Cde, the 2007 Cde and the Guideline were subject t review 2 years frm the date f the Cde being registered by the ACMA. The existing Cde was registered in May 2008 and, accrdingly, a review f the Cde began in May 2010, leading t a decisin t revise the Cde. The revisin was cnducted thrugh a Cde Revisin Steering Grup cmprised f an independent Chair, representatives frm the regulatrs, industry, cnsumer grups and an bserver frm the Department f Bradband, Cmmunicatins and the Digital Ecnmy (DBCDE). In additin, six Wrking Cmmittees each made up f industry and cnsumer representatives were appinted t revise individual chapters f the existing Cde and t reprt t the Steering Grup. The revisin f the Cde and Guideline cincided with the Recnnecting the Custmer public inquiry undertaken by the Australian Cmmunicatins and Media Authrity (ACMA). Many f the recmmendatins made in the ACMA s Recnnecting the Custmer final public inquiry reprt (published in September 2011) have been incrprated int the revised Cde. As a registered Cde, the ACMA may direct any carriage service prvider r business supplying gds r services fr use in cnnectin with the supply f a listed carriage service t cmply with the TCP Cde. The Cde is enfrceable by the ACMA. Current regulatry arrangements Sectin 112 f the Act utlines the intentin f Parliament that the telecmmunicatins industry develps industry cdes relating t telecmmunicatins activities. Sectin 113 lists Telecmmunicatins Cnsumer Prtectins Cde C628:2012 Explanatry Statement 1

2 examples f the matters that may be dealt with by the develpment f an industry cde. The list includes the areas cvered by the existing (and revised) Cde. The Telecmmunicatins (Cnsumer Prtectin and Service Standards) Act 1999 (Cth) requires carriers and carriage service prviders t enter int and cmply with the TIO Scheme. This scheme is an avenue f last resrt fr the handling f end-user cmplaints abut carriage services. Subject t the cnsent f the TIO, this Cde cnfers pwers n the TIO t handle cmplaints abut matters arising under the Cde. The existing Cde sets ut cmmunity safeguards in the areas f: Custmer infrmatin n prices, terms and cnditins Cnsumer cntracts Billing Credit management Custmer transfer Cmplaint handling Cde administratin and cmpliance Why current regulatry arrangements are inadequate Industry and cnsumer grups believed that the existing TCP Cde did nt adequately address a variety f ld and newly-arisen cnsumer issues and that actin was needed t imprve custmer satisfactin and thereby reduce custmer cmplaint vlumes. In additin, the cmmencement f the new Australian Cnsumer Law (ACL) (i.e. Schedule 2 f the Cmpetitin and Cnsumer Act 2010) n 1 January 2011 suggested an alignment f the bligatins under the ACL and the TCP Cde wuld be beneficial. The existing Cde Administratin and Cmpliance Scheme (CACS) was deemed t be inadequate in achieving cmpliance. It applied t nly a limited number f industry participants (i.e. Telstra, Optus, VHA, Pwertel and AAPT, as nly thse rganisatins are signatries t ne r several Cdes), it has nt been used in the past and n mnitring r reprting activity has been undertaken in the past few years. (Cmmunicatins Alliance will withdraw the CACS upn registratin f the revised TCP Cde.) In September 2011 and as a result f the Recnnecting the Custmer public inquiry the ACMA fund that the existing Cde is nt perating t prvide apprpriate cmmunity safeguards r therwise perating t regulate adequately participants in the telecmmunicatins industry t which it applies. The ACMA therefre issued a ntice under subsectin 125(1) f the Act requesting that Cmmunicatins Alliance, as the assciatin that develped the existing TCP Cde, address thse deficiencies within 150 days f the ntice, i.e. by early February Hw the Cde builds n and enhances the current regulatry arrangements The revised Cde will prvide additinal prtectin fr cnsumers in their dealings with the telecmmunicatins industry and ensure utcmes that shuld imprve the custmers telecmmunicatins experience. Existing prvisins have been tightened and/r made clearer and new bligatins have been added t the revised Cde. The revised Cde builds n the structure f its predecessr (and simplifies it) but takes a different apprach in that it stipulates desired cnsumer utcmes which are t be achieved thrugh specified supplier actins (i.e. as laid ut in mre detailed cde Telecmmunicatins Cnsumer Prtectins Cde C628:2012 Explanatry Statement 2

3 prvisins). The revised Cde als uses simpler language and places additinal emphasis n accessibility f infrmatin fr all cnsumers in their dealings with the telecmmunicatins industry. Due t its new apprach f cnsumer utcmes and supplier actins in cmbinatin with simplified language, maintaining a separate Guideline has been deemed unnecessary and the existing Guideline will be withdrawn upn registratin f the revised Cde. What the Cde will accmplish The revised Cde will further enhance existing cmmunity safeguards via the intrductin f new requirements n suppliers. Simplificatin f language and f the Cde s structure will assist suppliers in interpreting and implementing Cde rules and will als allw interested cnsumers t mre easily understand their rights and bligatins. An intrductry statement t the Cde sets ut the key cmmitments f suppliers t cnsumers and prvides a brief summary f each f the Cde s chapters. These benefits are als targeted at further reducing the numbers f cmplaints made t suppliers and the TIO. Anticipated benefits t cnsumers In additin t the afrementined increased accessibility f the Cde itself thrugh a simplified language, structure and the inclusin f an intrductry statement, cnsumers are anticipated t benefit frm the varius enhanced requirements in the Cde, in particular frm: Advertising prvisin f mre and clearer infrmatin abut prducts befre the pint f sale the Plan Essentials summary f ffer dcument additinal prvisins arund unit pricing infrmatin in advertisements and the cntent f advertising strnger cntrls n telecmmunicatins prduct advertising and the phaseut f the term cap fr nn-hard-cap plans; Billing a reduced back-billing perid a widening f billing prvisins t als apply t pre-paid services a right t free-f-charge histric billing infrmatin fr 24 mnths additinal bill cntent and itemisatin prvisins, including the ttal amunt f the bill fr each f the tw previus billing perids fr included value plans Expenditure management tls mandatry vice/sms and data usage ntificatin requirements, incl. requirements arund usage infrmatin delay Financial hardship increased bligatins n suppliers cncerning custmers wh experience financial hardship Transfer clarificatins f infrmed cnsent in the cntext f changing suppliers Telecmmunicatins Cnsumer Prtectins Cde C628:2012 Explanatry Statement 3

4 requirements arund pst-custmer-transfer ntificatins prvisins cvering custmer transfers resulting frm mergers Cmplaint handling a streamlined definitin f cmplaint t exclude initial fault and service calls (unless they are ldged as a cmplaint) tighter timeframes fr cmplaint acknwledgement and reslutin bligatins t advise custmers f cmplaint utcmes a mre explicit prmtin t custmers f the alternative dispute reslutin services ffered by the TIO the bligatin fr suppliers t give custmers a unique cmplaint reference number r identifier, t make it easier t track the prgress f reslutin f a specific cmplaint Cmpliance the creatin f a strng new independent bdy Cmmunicatins Cmpliance t mnitr the perfrmance f suppliers in cmplying with the Cde the bligatin fr Cmmunicatins Cmpliance and industry t develp metrics within 6 mnths f TCP Cde registratin and fr suppliers t reprt against thse metrics mandatry cmpliance attestatins (fr large suppliers certified by an external assessr) Anticipated benefits t industry It is anticipated that industry will benefit frm the clarificatin f bligatins in the revised Cde as well as the alignment f the Cde with the new ACL. Imprtantly, it is als anticipated that the tightened and new prvisins f the Cde will increase custmer satisfactin and, as a result, increase custmer retentin, reduce bad debt and custmer management csts. Increased accessibility t the Cde will als benefit industry custmer service and regulatry staff. Anticipated csts t industry Industry participants will incur initial and nging csts in relatin t cmpliance with this Cde. These will include (but are nt limited t) significant csts assciated with the intrductin f additinal pre-sales infrmatin prvisin requirements, the realisatin f vice/sms and data usage ntificatins and changes t bills and billing systems as well as the cmplaint handling prcesses. New suppliers will need t ensure that cmpliance with the Cde is built int their prcesses and systems. Delayed Implementatin Several f the imprved cnsumer prtectins included in the Cde require a substantial industry wide investment and change in suppliers prcedures and systems befre they can be implemented. These changes t suppliers' prcesses and systems will take cnsiderable time, effrt and resurces, s a reasnable transitinal perid befre implementatin was cnsidered necessary t ensure that suppliers have sufficient time t develp and implement Telecmmunicatins Cnsumer Prtectins Cde C628:2012 Explanatry Statement 4

5 the required prcesses and systems and s e cmply with the prvisins f the Cde when it takes effect. Clause 1.5 f the Cde prvides that sme Cde rules will nly take effect at differing pints in time after registratin by the ACMA and therefre the Cde will be implemented in a number f stages. Immediately upn registratin the Cde will becme effective with the exceptins f: Fr the purpses f Chapter 9, the Cde Cmpliance Framewrk will nt cmmence until that date which is 6 mnths after the date f registratin f this Cde with ACMA. The bligatins under clause 4.1.2, Summary f Offer, will nt cmmence until that date which is 6 mnths after the date f registratin f this Cde with the ACMA. The bligatins under clause 4.2.5, Standard Charges in Advertising, will nt cmmence until that date which is 8 weeks after the date f registratin f this Cde with the ACMA. The bligatins under clause (n), relating t the prvisin f the ttal amunts f each f the tw previus Billing Perids, will nt cmmence until that date which is 6 mnths after the date f registratin f this Cde with the ACMA. The bligatins under clause 6.5.2, Usage ntificatins, will nt cmmence until: in respect f clauses 6.5.2(a) and (b), internet data and mbile data, that date which is 12 mnths after the date f registratin f this Cde with the ACMA, and in respect f clause 6.5.2(c), mbile vice and SMS, that date which is 24 mnths after the date f registratin f this Cde with the ACMA r 1 March 2014, whichever date ccurs later. The ntificatin regimes cvering mbile vice and SMS services have a lnger maximum implementatin perid (24 mnths) than applies t data usage ntificatins. This reflects the fact that the system change requirements t enable the ntificatin capability fr mbile vice and SMS are typically mre cmplex than fr data services, and many smaller prviders will take time t be able t cmply with this element f the Cde. Telecmmunicatins Cnsumer Prtectins Cde C628:2012 Explanatry Statement 5