Need to know
- The Telecommunications Industry Ombudsman's 2024–25 annual report is just the latest indicator that industry self-regulation is falling short
- Hardship complaints to the ombudsman went up 46% compared to the previous 12 months, while complaints about poor mobile coverage jumped 25%
- The Fair Call Coalition is calling on the federal regulator to scrap the industry-devised Telecommunications Consumer Protection (TCP) Code and move to direct regulation
If you're wondering why telcos in Australia seem to fail their customers so often without facing a major regulatory overhaul, consider the Telecommunications Consumer Protection (TCP) Code.
The name conveys a weighty sense of legislative power, but in fact the code was created by the industry itself, and the government body that oversees the sector – the Australian Communications and Media Authority (ACMA) – merely reviews and approves it.
The ACMA theoretically has the force of law at that point, but in the last two years it has taken action on TCP Code violations only three times. In each case, the punishment was light – the telcos were formally instructed to comply with the code. (ACMA took a number of other regulatory actions over that time for violations of other industry codes, standards and acts.)
Hardship complaints to the ombudsman went up 46% compared to the previous 12 months
The Telecommunications Industry Ombudsman's (TIO) 2024–25 annual report contains a fresh batch of evidence that the TCP Code isn't working as intended, especially for customers in financial trouble.
Hardship complaints to the ombudsman went up 46% compared to the previous 12 months, a statistic that calls for some historical perspective. Telco customers often end up missing payments because they were sold services they couldn't afford by pushy salespeople, as was the case when Optus targeted First Nations and other vulnerable customers with inappropriate products and services and sent debt collectors after them when they couldn't pay.
(The company was hit with a $100 million penalty for the conduct in September this year in a case brought by the Australian Competition and Consumer Commission (ACCC), not ACMA. In 2021, an ACCC case arising from similarly unconscionable practices resulted in a $50 million penalty for Telstra.)
The evidence is overwhelming, mis-selling, misleading coverage claims and poor handling of financial hardship are systemic industry issues
ACCAN CEO Carol Bennett
The Optus and Telstra examples are high profile cases that are part of a larger pattern across the industry, according to Australian Communications Consumer Action Network (ACCAN) CEO Carol Bennett. In her view, the latest TIO report proves matters are only getting worse.
"The TIO's findings confirm what we are hearing every day – that poor sales practices and inadequate safeguards are hurting consumers, particularly those who are already vulnerable. The evidence is overwhelming: mis-selling, misleading coverage claims and poor handling of financial hardship are systemic industry issues."
According to ACCAN's research, 43% of consumers don't trust their mobile or home internet provider to act in their best interest, 30% say the coverage they receive is different to what they were told, and 21% report feeling pressured to sign up for a more expensive plan than they wanted. Then there's the quality of the service you get, especially on our most frequently used devices. Complaints to the TIO about poor mobile coverage rose 25% in 2024–25.
Advocates urge ACMA to scrap the code
After an industry review that took over two years, an updated TCP Code was submitted to ACMA for registration in May this year. The regulator recently rejected this updated version, but consumer advocates have had enough of ACMA's light touch approach to the telco sector.
In September this year, the Fair Call Coalition – an alliance of 20 consumer organisations – called on ACMA to scrap the industry's self-regulatory code and move to direct regulation, especially when it comes to essential telco consumer protections, such as hardship provisions.
To an extent, direct regulation is already in place. In July this year, ACMA rolled out enforceable industry standards for consumers experiencing domestic and family violence.
In September this year, the Fair Call Coalition – an alliance of 20 consumer organisations – called on ACMA to scrap the industry's self-regulatory code and move to direct regulation
The guidance in the TCP Code is for telcos to offer flexible repayment options to family violence victims 'where possible'. But this guidance alone clearly wasn't enough to protect those impacted by family violence – telcos often made the situation worse for victims and their children beyond the issue of debt. When a victim tried to deal with a telco on their own to keep their services active, companies often insisted that the abuser take part in the process. The new enforceable standards aim to address these issues.
"Under these rules, customers will not have to repeatedly explain their circumstances and will be able to choose the time and method for communication with their telco. Importantly, these customers will also be able to access this assistance confident that they will never be asked to engage with the alleged perpetrator to resolve their telco issues," ACMA chair Nerida O'Loughlin said in July.
Consumer protections groups have called on the federal regulator to scrap the industry-devised code in favour of direct regulation.
Pressure sales, flimsy credit checks
But there are still no enforceable standards in areas of longstanding consumer harm such as sales practices and credit assessments, and telco customers continue to be upsold on services that are financially inappropriate for their circumstances.
"ACMA must demonstrate that it has the backbone to stand up for consumers. It is simply not acceptable to keep accepting a deeply flawed self-regulatory code that has proven to have failed consumers," Bennett says.
Other members of the Fair Call Coalition are in agreement.
"Calls to Mob Strong Debt Help about telcos tripled in the last year – showing the impact on First Nations peoples from telco failures," says Mob Strong senior financial counselling and strategy lead Bettina Cooper.
It is time for our consumer protection framework to be upgraded to reflect how essential telco services are for our lives
Consumer Policy Research Centre CEO Erin Turner
"We have seen harm done to First Nations people before when regulators shy away from their responsibilities and protecting First Nations people's financial rights."
"It is clear that self-regulation isn't working in the telco sector," says Consumer Policy Research Centre (CPRC) CEO Erin Turner.
"In 2024, CPRC found that 55% of Australians had a problem with a telco service, yet nearly half of this group (46%) didn't raise their complaint as they don't trust telcos to hear them out and fix problems. It is time for our consumer protection framework to be upgraded to reflect how essential telco services are for our lives."
Financial Counselling Australia director of policy and campaigns Rebekah Sarkoezy says financial counsellors regularly "support clients who are struggling with unaffordable debt due the bad sales practices and poor affordability checks of telcos. They deserve adequate protection, and self-regulation simply just doesn't cut it".
The telco industry as a whole has failed to appropriately support customers in hardship.
ACMA knows the TCP Code is failing
Australian Communications Consumer Action Network (ACCAN) obtained documents through Freedom of Information requests that reveal just how slow ACMA is moving on the key issues affecting telco customers, chief among them sales practices, credit assessments, and financial hardship support.
Though heavily redacted, they show that ACMA committed to moving to direct regulation by the end of 2023 unless the TCP Code started effectively dealing with these issues, which it clearly has not.
Email exchanges between ACMA chair Nerida O'Loughlin and the communications industry peak body, the Australian Telecommunications Alliance, in September 2024 reveal that ACMA had serious concerns about the TCP Code's guidance on sales practices.
ACMA seemingly held the industry's hand to chart a course to avoid direct regulation
ACCAN statement
"Despite this, ACMA seemingly held the industry's hand to chart a course to avoid direct regulation," ACCAN said in a joint Fair Call Coalition statement, adding that the FOI documents "paint a picture of a regulator who recognises ongoing consumer harm, yet through delays and inaction continues to tolerate the deficiencies it has identified in the code".
For CEO Carol Bennett, the time has come for the federal regulator to take control.
"It is beyond time ACMA puts consumers first and treats telco as the essential service it is by putting an end to the self-regulatory system that has been in place for too long and harmed too many."
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