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Trends overview

The TIO received 193,702 new complaints in the 2011-12 financial year, a two per cent drop compared to 2010-11. Although this is not, of itself, a substantial decrease from the record number of complaints we received in 2010-11, we have noticed positive signs for more significant decreases in new complaints in the April-June 2012 period.

A clearly stated increased commitment to customer retention, customer service and complaint handling by the three larger telecommunications providers has contributed to significant decreases in complaints to the TIO in the last quarter of 2011-12.

The successful rollout of conciliation at the TIO over the financial year has contributed to quicker resolutions and led to a substantial decrease in the number of complaints requiring detailed investigations (level 3 and 4).

Complaints about the "big three" service providers

Complaints made about the big three telcos – Telstra, Optus and Vodafone – understandably have the most substantial impact on overall TIO complaint trends.

Telstra has registered a 21 per cent decrease in complaints, making 2011-12 its third consecutive year of reduced complaints to the TIO. Improvements in customer service and complaint handling are evidenced by reductions in issues about undertakings not actioned, inadequate advice, point of sale advice and bill disputes.

This decrease has been offset by increased complaints for Optus and Vodafone.

Optus had substantial increases in new complaint numbers, up almost 47 per cent, driven by mobile service-related issues such as faults, inadequate spend controls and disputed internet charges.

The TIO received almost 17 per cent less complaints about Optus in the final quarter of 2011-12 when compared to the previous quarter.

Complaints about Vodafone have also continued to rise (11 per cent), but the issues in these complaints have changed from last year. The issues that prevailed in Vodafone’s complaints in 2010-11 about its well publicised network problems have reduced significantly. However, mobile-associated issues such as inadequate spend controls and internet usage charges have had significant increases.

The TIO received 25 per cent fewer new complaints about Vodafone in the final quarter of 2011‑12 when compared to the previous quarter.

Complaints about mobile phone services

Continuing a trend in consumer demand for mobile devices, the proportion of mobile service complaints to the TIO in 2011-12 was 63 per cent, or 122,834 – a 9 per cent increase from the previous year.

There have been increases across most issues in mobile phone service complaints, but those in the areas of telecommunications debt (credit management) and billing continue to be of concern. We received:

  • 15,752 issues about financial overcommitment due to inadequate spend management tools, double the number received in 2010-11
  • 13,943 issues where consumers disputed the total of their bill, a 33 per cent increase
  • 10,556 issues about disputed internet usage charges, a 150 per cent increase from the previous year
  • 4,186 issues about disputed roaming charges, a 69 per cent increase compared to the previous year.

In fact, 88 per cent of all the issues of financial overcommitment due to inadequate spend management tools that we recorded were from mobile phone users; 63 per cent of all the issues we recorded about disputed totals of bills were from mobile phone users; and 83 per cent of the issues of disputed internet charges were from mobile phone users.

In contrast, credit management issues for non-mobile internet services have decreased for the last two years. Larger data allowances, data shaping and timely usage alerts have contributed to this decrease. There are valuable lessons to be learnt in the mobile phone market from dedicated internet services.

These issues also show the urgency for the increased safeguards contained in the new Telecommunications Consumer Protections Code, which came into effect on 1 September 2012. Those specific requirements about unit pricing and timely usage alerts won’t come into effect until 2013; it is therefore important that consumers seek to become well informed of the pricing structure of their services, and for service providers to play an active role in protecting their consumers from falling into debts they cannot afford to pay.

The TIO facilitated a forum on financial hardship in November 2011 to address some of the issues that arise from telecommunications debt and the impact it can have on vulnerable consumers.

Small business complaints

In 2011-12 we worked with the aim of remaining relevant to small business consumers by expanding our definition of what we consider to be a small business, after noticing an increase in the number and complexity of disputes in complaints we received from small business consumers.

Small business complaints make up almost 14 per cent of all complaints to the TIO, with 27,008 complaints received during the financial year. This was an increase of 18 per cent compared to the previous year.

The issues that small business consumers mentioned in their complaints are similar to those raised by residential consumers: customer service issues, mobile phone coverage, confusing contract terms and inadequate spend management tools.

Increase in enquiries

We recorded 53,131 enquiries in 2011-12, a 33 per cent increase compared to the previous year. The main driver for these enquiries was consumers seeking preliminary advice before submitting a complaint with their service provider. This increase may have to do with increased community awareness about TIO services.

A significant number of enquiries was also received from consumers who came to the TIO before they had given their service provider an opportunity to consider their complaint.

We also received 1,336 enquiries about subscription television services, which are outside of our jurisdiction. When we receive complaints about pay TV we refer consumers to their provider or to the relevant Fair Trading office for their state. In May 2012 we made a submission to the Australian Subscription Television and Radio Association (ASTRA) in which we outlined the number of enquiries made about Pay TV and common issues in them, highlighting the need for an external dispute resolution service that can take consumer complaints about them.

Our submission supported the recommendation made by the Productivity Commission that TIO’s powers should be extended to accept complaints about subscription television, given the increased convergence of communications services and the nature of the issues in enquiries about Pay TV, which closely align to the issues we see in telecommunications services.

Laura’s complaint

Laura's complaint

Laura contacted us after being unable to resolve a dispute over excess internet usage charges from her mobile with her provider.

She told us that when she signed up for a smartphone plan, she asked the provider to send her an SMS when she was close to reaching her plan limit. This would be easier for her than checking an online usage meter. The provider obliged and everything went well until one month she didn’t receive an SMS and, instead of her usual $150 bill, her provider sent an invoice for $1,600.

Laura told us that the following month she didn’t receive an SMS either and her account came to $1,100. With a debt of $2,700, she called her provider to find out why the SMS warnings had stopped and to try and have some of the charges waived as she believed her provider hadn’t done enough to alert her about the high bills.

Her provider gave her a $600 credit but was unable to explain why the SMS alerts had stopped. Laura was not satisfied with this resolution and called us. After we referred the complaint back to her service provider, she was offered a further $1,900 credit but the SMS alerts were not restored and she continued to receive high bills for another two months.

Laura called us back and we conciliated the complaint. During that process, the provider’s complaint handling staff told us that the reason why Laura wasn’t receiving an SMS was because they couldn’t send an SMS for excess data, only for excess calls. They also told us they had talked to Laura about ways to check her usage after our initial referral. They offered a further credit to resolve the complaint, bringing her total account down to $600, which she agreed to pay.

Laura’s complaint

Laura's complaint

Laura contacted us after being unable to resolve a dispute over excess internet usage charges from her mobile with her provider.

She told us that when she signed up for a smartphone plan, she asked the provider to send her an SMS when she was close to reaching her plan limit. This would be easier for her than checking an online usage meter. The provider obliged and everything went well until one month she didn’t receive an SMS and, instead of her usual $150 bill, her provider sent an invoice for $1,600.

Laura told us that the following month she didn’t receive an SMS either and her account came to $1,100. With a debt of $2,700, she called her provider to find out why the SMS warnings had stopped and to try and have some of the charges waived as she believed her provider hadn’t done enough to alert her about the high bills.

Her provider gave her a $600 credit but was unable to explain why the SMS alerts had stopped. Laura was not satisfied with this resolution and called us. After we referred the complaint back to her service provider, she was offered a further $1,900 credit but the SMS alerts were not restored and she continued to receive high bills for another two months.

Laura called us back and we conciliated the complaint. During that process, the provider’s complaint handling staff told us that the reason why Laura wasn’t receiving an SMS was because they couldn’t send an SMS for excess data, only for excess calls. They also told us they had talked to Laura about ways to check her usage after our initial referral. They offered a further credit to resolve the complaint, bringing her total account down to $600, which she agreed to pay.