iiNet, Dodo breach consumer billing rules

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iiNet, Dodo breach consumer billing rules

ACMA sends formal warning to telcos.

Internet service providers iiNet and Dodo have copped formal warnings from the Australian Communications and Media Authority for dropping the ball on consumer rights in regards to billing users.

ACMA said iiNet and Dodo had both been warned for falling short of direct debit requirements written into the Telecommunications Consumer Protections Code.

"Many providers are now offering services to customers on a direct debit basis only. Those providers need to understand that it is critically important their direct debit practices comply with the TCP Code," ACMA chairman Chris Chapman said in a statement.

The investigation into iiNet found the ISP violated its direct debit obligations in four different ways.

On 96 occasions in July last year, iiNet failed to provide customers the minimum ten days to check their bill before direct debit occurred. The company also instigated credit management action on disputed bills – which it is not allowed to do under the TCP Code – in five cases between June and October 2013.

ACMA warned service providers that they "must not take credit management action in relation to a disputed amount that is the subject of an unresolved complaint" when they are aware the case hasn't been resolved "to the satisfaction of the consumer".

It also reprimanded iiNet for failing to cancel direct debit arrangements within the maximum three days allowed under the TCP code on another three occasions between June and September last year, and for failing to comply with a customer's direct debit authorisation in four cases that same period.

A separate inquiry found Dodo breached the code by not cancelling direct debit in a timely manner on seven occasions from December 2012 to September 2013, and by not following customers' direct debit authorisation 12 times between June and September last year.

ACMA said both service providers had taken remedial action since the respective investigations.

The watchdog has been targeting direct debit practices in the industry. The TCP Code came into effect on September 2012 and ACMA has since handed down 152 formal warnings for violations.

iiNet declined to comment. 

A spokesperson for Dodo's parent firm M2 said the company takes its compliance obligations seriously.

"We process millions of transactions successfully each month and our processes have been proven to be compliant, however in the instances highlighted we did experience human error."

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