TIO cracks down on small business complaints

Fewer businesses will qualify for free telco dispute resolution.

The Telecommunications Industry Ombudsman has revealed plans to change its investigation criteria in a bid to stop larger businesses from taking advantage of its free complaint resolution service.

The changes to the way the TIO defines "small businesses" are partly a response to the sharp rise in complaints about telecommunications lodged by businesses.

The ombudsman - set up to field only complaints from residents and small businesses - will continue to field complaints from businesses that have 20 or less full-time employees and an annual turnover less than $3 million.

However, the TIO said it would no longer consider a business’ annual telco spend - currently set at $20,000 per provider - as an “active criteria” in determining whether or not the business qualified for the TIO's services.

The TIO would instead consider the business's ownership and whether its managers “contribute most of the operating capital” in order to judge whether it should be judged a "small business" under TIO rules.

Ombudsman Simon Cohen said each of the new criteria would be flexible on a case-by-case basis.

Cohen told iTnews the organisation was under no pressure to curb the number of complaints it received but hoped to refine the TIO’s investigative scope.

“If the dispute was one that is substantially outside what we’re able to make a decision or recommendation about, then we’d explain it to the small business and explain that the option of coming to us might not be the best option given the nature of the problem that they have,” he said.

That scope was widened significantly in May 2010, when the TIO gained powers to make compensation directives to telcos of up to $30,000 in a complaint or a recommendation of up to $85,000.

“The primary thing that’s driven us to look at the criteria is to acknowledge that the nature of telecommunication use by small business is changing,” Cohen said.

“The fact that the service that they’re being provided is changing leaves us, as a matter of good practice, to think about whether we’re remaining relevant to them.

“That includes not only the sorts of disputes we can deal with but the sorts of complaints that we deal with but the sorts of business that can make complaints.”

Complaints skyrocket

The changed criteria comes in response to a marked rise in complaints from small businesses, which saw figures increase 52 percent between the 2009 and 2010 financial years to 22,836 new complaints.

Small businesses accounted for 13 percent of all new complaints lodged with the TIO between July and December 2011, up from 11 percent over the 2010 financial year.

The TIO attributed the rise in complaints to online-only businesses which relied on internet connections and increasingly mobile broadband and smartphone services to operate.

The new claims were largely about inadequate customer service, poor mobile coverage and complaint resolution.

Investigations fall

Despite an increase in the number of small business complaints, enquiries and investigations overall (for individuals and small businesses) dropped for the fourth quarter of the 2011 calendar year.

The ombudsman recorded a total of 48,100 ‘new complaints’ - many of which did not require further intervention from the TIO - down from 51,196 complaints fielded in the previous quarter.

The first quarter of the year - coinciding with a significant increase in complaints about Vodafone’s network - remained the peak quarter at nearly 60,000 new complaints.

But the number of level three investigations - requiring further investigation - across the fourth quarter dropped significantly from 208 investigations, to 64.

The ombudsman did not undertake any level four investigations - requiring a final direction or decision by the TIO - during the quarter, down from 33 investigations between July and September.

“Decreased investigations stand out this quarter as a significant achievement,” Ombudsman Simon Cohen said.

“Conciliation and other business improvements by the TIO, along with good engagement by service providers and consumers, means faster resolutions and fewer cases that require detailed investigation.”

Cohen told iTnews last year that continued drops in required investigations had come as a result of streamlined processes within the organisation.