The Australian Communications and Media Authority (ACMA) has reiterated that the protection of vulnerable consumers is a compliance priority for Australian telcos by:

  • releasing a report (Audit Report) following its audit of nine leading telcos regarding their approach to compliance with the Telecommunications Consumer Protections Code (TCP Code); and
  • launching a consultation regarding a draft list of expectations (Draft Expectations) for Australian phone and internet service providers when dealing with vulnerable consumers.

The Audit Report and Draft Expectations arrive shortly after the Federal Court upheld a record $50 million fine against Telstra for the “systematic” sale of post-paid mobile products to 108 Indigenous Australians, and an ACCAN report found that poor sales practices by telcos had led to systemic debt for First Australian telecommunications consumers in regional and remote Central Australian communities.

Against this backdrop, the Audit Report raised “serious doubts” that telco sales staff are equipped to responsibly offer products to vulnerable consumers. Complementing the ACCC's existing compliance guide for businesses dealing with disadvantaged or vulnerable consumers, the Draft Expectations therefore call on the telco industry to:

  • proactively take a broad and inclusive approach to identify vulnerable customers by recognising a wide range of different vulnerabilities that their customer base may face;
  • remove incentives for up-selling to vulnerable consumers;
  • provide appropriate support for customers experiencing financial hardship;
  • use disconnection as a last resort; and 
  • build a culture of responsibility from the top down.

The TCP Code requires telcos to ensure that their sales representatives sell their products in a responsible manner and interact appropriately with vulnerable consumers, including obligations in relation to:

  • dealing with the disadvantaged and vulnerable (clause 3.4);
  • systems, processes and training (clause 3.3);
  • responsible selling (clause 4.5.1); and
  • identifying and meeting consumer needs (clause 4.5.2).

The TCP Code is enforceable by ACMA. If ACMA is satisfied that a telco has contravened the Code, ACMA can either issue a formal warning or a direction to comply, and can take further enforcement action (such as issuing an infringement notice or seeking a pecuniary penalty) if a direction is not complied with.

Public consultation on the Draft Expectations is now open, with submissions due by Wednesday, September 8. Submissions can be made online via the ACMA website.