ACCC puts the telco industry "on notice"

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ACCC puts the telco industry "on notice"

Australia’s consumer regulator the ACCC is warning telecommunications operators they will soon face fines of up to $1 million if they do not clean up their act.

Speaking at the ATUG conference late Friday, a terse ACCC chairman Graeme Samuel said the regulator receives 4000 complaints around communications a year - making it consistently the most complained about industry sector in Australia.

Australia's largest four telcos, he said, sit at numbers 1, 3, 7 and 9 in the top ten companies complained about.

"I'm afraid the truth is the industry is not consumer friendly," Samuel said.

"It is not something the industry can be proud of."

"Today, the ACCC is putting the telecommunications industry on notice," he said.

"Misleading advertising, unfair contracts, inadequate disclosure and subscription scams are all in the ACCC's sights. Standards must improve or risk increased scrutiny and action."

"The ACCC is drawing a line in the sand - we're saying to the poor performers, and there are many of them, mend your ways."

The ACCC's main beef with the telecommunications industry is around misrepresentations of products, mobile premium services scams and phone cards.

Too many telcos, Samuel said, walk a fine line between marketing "puffery" and misleading advertising.

In a veiled threat to Australia's largest mobile carrier, Samuel said that some providers "currently undertaking network upgrades" were delivering messages to the market which border on creating "a misleading overall impression as to speeds typically achievable."
 
"The ACCC has long stated that it believes companies should avoid reference to "theoretical maximum" or "peak" speeds when making broadband speed claims," he said.

"This is because there is any number of factors that could affect the broadband speed a consumer is able to achieve. The ACCC strongly encourages broadband providers to ensure that any broadband speed representations made by them are consistent with actual customer experience."

He also said the very common practice of advertising mobile handsets as "free" or "zero dollars", when their costs are actually built into longer-term service plans, to be treading a fine line legally.

Samuel told that audience that Consumer Affairs Minister Chris Bowen gave the ACCC new powers in February, due to come into effect by January 2010, which will enable the regulator to levy fines of up to $1 million against those companies that include unfair terms in their contracts.
 
Bowen "has identified mobile phone contracts as the type of contract subject to new unfair contract laws," Samuel said.

Samuel said the ACCC is constantly receiving complaints around mobile premium services such as news, horoscopes, games and competitions.

Too many consumers are being duped into signing up for subscription services when they think they are paying a one off fee, he said. They then face significant details leaving the service.

Samuels said it is "frankly an inadequate response" for the telco to advise customers to send a "STOP" message, and shrug their shoulders should the service provider continue to bill the consumer.

"If all carriers do not exhibit a responsible attitude to closing down rogue operators, they must expect the ACCC to pursue remedies available to it under the Trade Practices Act," he said.

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