Telcos must lift customer service game before NBN

Ombudsman needs new fangs to bite bad customer service

Take-up of services on the National Broadband Network (NBN) could be hindered by poor telecommunications customer service, the Australian Telecommunications User Group (ATUG) has claimed.

The telco sector has long had a poor reputation for customer service and in recent years experienced a high level of consumer complaints.

According to a report from the Australian Communications and Media Authority (ACMA) customer service complaints grew by 72 per cent to 30 June, 2009 while “complaints-handling issues” grew by a record 130 per cent. In the 12 months prior to that (the 07/08 financial year), customer service complaints grew 94.2 per cent; complaints-handling issues figures were not provided for that period.

The latest figures for the nine months to 31 March, 2010, show complaints-handling issues and customer service complaints were up 19.8 per cent and 13.1 per cent respectively.

ATUG managing director, Rosemary Sinclair, expected the figures to be up to 10 times higher when including unreported complaints.

“The problems are going to become very, very difficult under the NBN. The industry assures me I’m worrying about nothing... but if consumers have been burnt so far, it is going to make them uncertain about the NBN and take-up will be less than required to ensure that transformation and productivity,” Sinclair said.

“I think there needs to be a rethink of the role of the TIO [Telecommunications Industry Ombudsman] which is a statute that has been in place for a long time. The cost-benefit equation may be better if the industry puts a bit of money into the TIO without having to invest so much into fixing customer service problems.

“Some more pro-consumer powers would help the industry so we don’t have to wait until we have a complaint. I told the premium content service businesses they will need to be transparent, or rest-assured the government will be after them. It took the government two and a half years to pursue them, even though it was quite obvious from the outset that they game was to trick consumers into contracts.”

The woeful streak lead former TIO, now Internet Ombudsman, Deirdre O’Donnell, to proclaim herself “the queen of pain” after she registered the highest number of complaints at an Auckland meeting of international industry regulators in 2008.

iiNet regulatory chief and TIO board member, Steve Dalby, said complaints may be attributed to the complexity of telecommunications plans, phones and internal carrier upgrades, and claimed iiNet complaints had dropped by some 15 per cent over the last few years.

“Telstra has being going through its huge billing overhaul which understandably could cause some problems,” Dalby said, speaking on behalf of iiNet.

The complaints were detailed in the ACMA report, which claimed the TIO’s Telecommunications Consumer Protections “may be inadequate”.

“Other industries, such as financial services, have a different approach, mandating and closely controlling the standard of internal and external dispute resolution mechanisms,” the report read.

“These examples may assist in ascertaining best practice complaints-handling standards for the Australian telecommunications industry.

“While the market may offer solutions to these problems, other options exist including, changes to co-regulatory arrangements, regulator practice, and regulation.”

TIO community liaison manager, Philip Money, said he could not comment on the need to increase the agency’s powers, and noted much of the complaints are due to poor business processes and call-handling.

“Customers being passed around to many different agents, and having to repeat themselves every-time, not getting call-backs, and hanging on phone for hours are the sort of complaints [about telcos],” Money said.

“We see lots of undertakings, but not a lot of action.”

He said complaints had dropped in the top 10 largest telcos, since the TIO’s connect-resolve campaign last year, and added the agency is “looking forward” to working with the ACMA.

Both the ACMA and the TIO had received new powers over the last two years to act against breaches of the Telecommunications Act, and be involved in higher-value disputes.

Secret hotline?

The TIO had an unlisted “secret” phone number which was answered by an operator who resolved complaints on-the-spot, avoiding a several-month process, according to Sinclair.

The user group head said she witnessed a friend call the number in 2008 with a billing complaint which was resolved in the form of an immediate refund.

Sinclair said she had questioned why the line was not public, and believes in to no longer be in operation.

A request for confirmation has been lodged with the TIO.

The TIO handles complaints between telecommunications providers and their customers. In the absence of an alchemic phone number, telcos have 10 days to resolve disputes directly with their customers before the issue is escalated to a ‘level two’ complaint. The TIO may also raise complaints directly to level two if it is satisfied that the member has had sufficient opportunity to resolve it informally.

It charges telcos fees for complaint resolution, in an attempt to incentivise members to resolve issues before they are escalated to the TIO.

The ACMA report stated 1162 telcos were registered with the TIO as of last month. Some 24.22 million mobile services were estimated to be in operation last year, of which 10.67 million were fixed-line services and 8.4 million were Internet subscribers.

Telcos hauled about $21.2 billion in revenue in 2008.

In April, ACMA moved to address the high number of customer complaints in the telecommunications industry, launching a formal inquiry.

In his speech at the CommsDay Summit in Sydney, the ACMA chairman, Chris Chapman, said the inquiry would determine “how consumer expectations of customer service might be satisfied in the NBN-delivered broadband world”.

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Tags iiNetTelecommunications Industry Ombudsman (TIO)Australian Communications and Media Authority (ACMA)australian telecommunications user group (ATUG)

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