Vodafone warned over industry code breaches

Regulator mulls $250,000 penalty.

Australia's communications regulator has blasted Vodafone Australia for failing to act on multiple network and privacy issues this year, threatening fines of up to $250,000 if the company does not reform by February next year.

The Australian Communications and Media Authority found Vodafone and its mobile subsidiary had contravened five sections of the Telecommunications Consumer Protection (TCP) code at various points during 2010 and 2011.

ACMA found the telco had failed to communicate properly with customers surrounding network issues during the latter part of 2010 and early this year.

The telco "did not, between October and December 2010, provide timely information to its customers about network issues" and did not inform them of "known limitations in network coverage" during a five-month period while the company's mobile network suffered high congestion levels and drop-outs.

It was also found liable for the potential exposure of four million customer account files to retail partners in January this year due to "inadequate practices and process in place".

The latter instance sparked an investigation by the Privacy Commissioner over security around the telco's Siebel CRM system, which contained customers' names, dates of birth, PIN, driver's license numbers, addresses, credit card details and call records.

While the commissioner exonerated Vodafone - and the telco cut ties with the mobile reseller blamed for the breach - ACMA was not prepared to absolve Vodafone of its responsibility.

The regulator found that (as at September 2011) Vodafone still did not have the proper systems in place to record and analyse complaints to identify recurring customer service issues at the company, as required by the industry code.

The industry code was last updated in 2008 and is currently under review.

The telco was given until February 1 to comply with the five sections of the code.

"Vodafone has made positive changes over the course of this year but, from this point on, if either Vodafone company fails to comply with the TCP Code, the ACMA can approach the Federal Court seeking civil penalties of up to $250,000," said ACMA chairman, Chris Chapman.

Vodafone chief executive Nigel Dews said the company had already complied with ACMA's complaints since the investigation.

"We have supported the ACMA throughout their thorough and lengthy assessment, and while we respect the ACMA's view of past events, we haven't waited for their report to tell us what we've needed to do," he said.

"Customer service improvements were also made and we expanded the network information available to customers. Security measures were tightened for customer information."

These include provide postcode checks on customers to determine potential network coverage before prospective subscribers sign on with the company, and a network status page to update the telco's ongoing infrastructure upgrades.

The company said it had also implemented the systems required to record and trend customer complaints.